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WAKE UP, CANAD 




PETERSON 





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Book 'Y^% 



WAKE UP, CANADA! 



WAKE UP, CANADA! 

Reflections on 
Vital National Issues 



c. 



BY 



W. PETERSON 




TORONTO; THE MACMILLAN COMPANY OF 

CANADA, LTD., AT ST. MARTINS HOUSE 

MCMXIX 



7^ 



Copyright. Canada, 1919 

By THE MACM1LLAN COMPANY OF CANADA, LIMITED 

TORONTO 



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DEDICATION 

To the Editors 

of Canadian Newspapers 
and Periodicals: 

My Dear Fellow Craftsmen, 

It is usual to dedicate a book to some person or 
persons to whom the author is under obligation. 
There can be no question in my mind where my 
deepest obligation rests. Much of whatever in- 
formation I possess, I might almost say, that much 
of whatever useful education I possess, is due to a 
habit, acquired early in my life, of reading a wide 
range of newspapers and periodicals. There I 
have gleaned the worth-while facts, that largely 
have guided my business and journalistic career. 

I entertain the hope, perhaps vainly, that this 
little volume may prove of some inspiration to 
you, entrusted as you are with the responsible task 
of moulding public opinion. I cannot hope, and 
do not expect, that all my conclusions and theories 
will receive approval and support. Some of them 
will appear weird and visionary. But my main 
object in writing this somewhat rambling book has 
been to provoke investigation. Somewhere you 
may find the kernel of an idea that may lend itself 
to profitable elaboration. If so, my task has not 
been in vain. 

C. W. Peterson. 



PREFACE 

1 REGRETFULLY realize that this is a scold- 
ing, preaching, fault-finding sort of book, only 
mildly constructive. And Canada is not used to 
having her institutions libelled in book form. In 
Great Britain, on the other hand, every week or so, 
some unlicensed crank writes a volume on how to 
run the Empire, which, of course, no one ever takes 
seriously. The patronage and encouragement of 
this literary Hyde Park speaks volumes for the 
patriotism of British publishers! However, the 
precedent is now set in Canada, for better or for 
worse. 

There seems to be, somewhere, an unwritten law 
to the effect that no man shall write a book on any 
subject upon which he is not a recognised author- 
ity. This rule, of course, is frequently and pain- 
fully violated. It is going to be flagrantly trans- 
gressed in this case. Much of what appears in the 
following pages has doubtless been said before, and 
probably much more effectively than I am able to 
say it. The whole contents are merely random 
reflections on leading political and social questions 
of the day. If I have any apology to offer for 
inflicting these upon the public in book form, it is, 
that I have perhaps enjoyed somewhat exceptional 
opportunities, in the course of a wildly varied 
career, of observing many of these problems from 
more than one angle. 



viii WAKE UP, CANADA ! 

It will be obvious to those who are sufficiently 
interested to read the following pages, that it is not 
the mission of this volume to submit cut and dried 
remedies for the various ills and handicaps, social, 
political, and economic, under which Canada 
labours. Many of them are common to all coun- 
tries. My object is rather to bring some of our 
problems to the attention of thinking people, to 
contribute in a mild measure to intelligent discus- 
sion and to spur into action those whose respon- 
sibility it is to solve them. But, above everything, 
it is my earnest ambition to rouse Canadian men 
and women from their present apathetic attitude 
in regard to the politics and administration of the 
country and to kindle an intelligent interest in the 
great questions of the day. The field is so broad, 
however, that many patriotic intellects must lend 
their efforts towards exploring it and bringing use- 
ful suggestions to the surface. 

I love this Canada of ours — this clean, strenuous, 
blessed, young country, seemingly so enormously 
distant from the slimy, unwholesome social mess of 
Europe. But one cannot shut one's eyes to the evi- 
dences of unrest apparent even here. It is the main 
purpose of this book to contribute, to a modest 
extent, towards the awakening of Canada to a sense 
of her responsibilities and opportunities. We must 
look past errors bravely in the face and energetic- 
ally turn our attention to setting the house in order. 
Herein will lie Canada's salvation and her ability 
to fulfil her God-given destiny of becoming the 
haven of refuge for oppressed people, and for those 



PREFACE ix 

adventurous spirits who chafe at the restraints of 
older civilizations. 

When a book is written in the first person it is 
apparently customary to explain and apologize. I 
have so offended, but see no necessity for doing 
either in this case. I have drawn somewhat cop- 
iously upon my own personal experience, deeming 
such information to be the most reliable and con- 
vincing. Apart, however, from this consideration, 
I cannot tell my story effectively in any other way. 

C.W.P. 

Western Stock Ranches, 
Calgary, Alberta, 
April, 1919. ' 



CONTENTS 

Chapter Page 

Preface 

1 "Democracy on Trial" 1 

The aftermath of war — A record of democracy's 
efforts — Democracy and anarchy — Liberty and 
license — The line of true progress — The ideal 
democracy and the new spirit — The moral appeal — 
The surrender of self-determination. 

2 "Canadian Nationality" 14 

The French question — Dual language and single 
nationality — Quebec dominance — The hyphenated 
Canadian — Present and future problems — Uncon- 
scious absorption — Empire organization. 

3 "Political Parties and Classes" 25 

New programmes for new conditions — Funda- 
mental aims — Labour's and farmers' representation 
in Parliament — Class movements — The non-partisan 
spirit — The lawyer in politics — Ins and outs — The 
political machine — The sinews of war — Electoral 
reforms — Proportional representation— Compulsory 
voting — Campaign funds and campaign expenses — 
The private member and his limitations. 

4 "Business Government" 50 

New notions in government — Our ponderous 
machinery — Selection of cabinet ministers — Minis- 
terial misfits — Administration of public services — 
— Ministerial responsibility — A lesson in economy — 
The pork barrel — Government by Commission — 
Civil Service appointments — Chain of responsibility 
—The Senate. 

xi 



xii WAKE UP, CANADA ! 

Chapter Page 

5 "Public Administration of Commerce and 

Industry" 72 

The evolution of State socialism — The pros and cons 
of State ownership and operation — Inferences from 
war-time administration — The theory and the prac- 
tice^ — Elimination of competition — The vital import- 
ance of executive efficiency — Political effect — The 
State as an employer — The surrender of individual 
choice — The failure of the human unit. 

6 "Our Transportation Problems" 93 

Great Britain's policy — Canada's early railway policy 
— The present railway situation — Our 'no-man's- 
land' — Prodigality in construction and its effects — 
The Hudson's Bay Railway — The colonization prob- 
lem — Government monopoly v. Railway competition 
— Competition and higher rates — The two-system 
standard — Provincial control. 

7 "The Labourer and His Hire" 132 

The creation of capital — Compensation for its use — 
The Labour leader — Restriction of dividends — 
Labour and financial responsibility — The nobility 
of labour — Industrial relations — The small in- 
dustries — Labour's share — A better understanding 
— The six hour day — The minimum wage — Industrial 
warfare — The right to strike — Might v. right — The 
consumers' attitude — International relations — In- 
dustrial councils — Labour controlling industry — 
Speeding up — An appeal. 

8 "The Single-Tax Controversy" 187 

A study of the proposal — The confiscation of land — 
The concrete example — The farmer's point of view 
— Unearned increment — Adverse influence on town 
planning — The absentee land-owner — Taxation of 
idle land. 



CONTENTS xiii 

Chapter Page: 

9 "Industry and Tariff" 201 

Industrial encouragement — The new line-up — A 
hybrid tariff— The farmer and the tariff— The bonus 
system — Local aid to industry — A bar to industrial 
development — West v. East — The creation of local 
markets — A new national policy — A tariff commis- 
sion — Sectional sacrifices — The farmers' platform. 

10 "The Looting of Canada" 238 

High finance in merging of industries — Over-capital- 
ization — The State and the investment question — 
Blue-sky legislation — Analyzing the interests — Earn- 
ings of infant industries. 

11 "Scientific and Commercial Research" ... 246 

Necessity for co-ordination — The real purpose of 
research in Canada — The business man and the 
scientist— Internal trade statistics. 

12 "A National Trial Balance" 252 

A resume of the financial position of Canada after 
the war — Provincial and Municipal liabilities — Our 
debits and credits — The individual responsibility — 
Britain's plight — Reasons for optimism— The hour 
of great decisions. 

13 "Raising the Wind" 265 

The departmental machine — The super-Finance 
Minister — Canada's fiscal situation — Taxation on in- 
come — Business taxation — Excess profit taxation — 
Consumption taxation — Inheritance taxation — Com- 
parison of direct and indirect taxes — Conscription 
of wealth — Federal and Provincial revenue sources 
— Fiscal chaos. 



xiv WAKE UP, CANADA ! 

Chapter Page 

14 "The Farmer and His Taxes" 285 

The problem of taxation and agriculture — The 
farmer and tariff reform — Land taxation. 

15 "Rural Credit" 292 

Our banking system and its fault — The rural bor- 
rower — The moral asset — The use of capital on the 
farm — Provincial legislation — What New Zealand 
did. 

16 "The Man on the Land" 303 

Canada's potential wealth in agriculture — National 
stock-taking — The nation's paymaster — Difficulties of 
rural life — Its compensations — A plea for sympathy 
— Farm labour — Our slow Western development — 
The double handicap of tariff — The question of 
markets— The U.S. tariff attitude— The high cost of 
living — Agricultural profits — Rural depopulation. 

17 "The Returned Soldier and Matters Mili- 

tary" 336 

Absorbing the veteran — Our individual duty — His 
responsibility — Soldier's settlement plan — Some pit- 
falls — The financial aspect — Community settlements 
— The problem of repayment — Creation of capital 
— Indian Reserve lands — The lease system — Our 
future military establishment — The Kingston gradu- 
ate — Politics and soldiering — The U.S. Corps of 
Engineers — Fitting the soldier for civil life — An 
army constructively employed. 

18 "Education and Sane Standards" 353 

Where our educational system fails— Teachers' 
salaries — Standard in life — Responsibility of the 
citizen to the State — Technical education— The 
human element in social progress. 



WAKE UP, CANADA! 



WAKE UP, CANADA! 

CHAPTER ONE 

DEMOCRACY ON TRIAL 
1. 

THE amazing cataclysm into which a peaceful 
world was precipitated in 1914 ultimately 
gained such proportions that the normal life of the 
individual the world over was affected to a greater 
or lesser extent. Carefully treasured economic 
theories have been blasted into utter oblivion. 
Nations are drifting like rudderless ships on the 
high seas. Patching here and mending there, some 
hope to sail into safe havens. Others lie bleeding 
and mangled while irrepressible mobs put to the 
torch the outward and visible evidences of cent- 
uries of slow and laborious progress and civil- 
ization. 

If one does not misread all the signs and tokens, 
the end of this bloody war is ushering in a new era 
all over the civilized world. We shall be taught to 
renounce many things that the present generation 
has most admired in men; wealth, power, position 
and fame, and to estimate men and things at their 
true worth. The drone will be an outcast. He 
probably will not have the wealth to enable him to 
lead the drone's existence. The State will require 
it. The man who does things will be the leader — 

(0 



2 WAKE UP, CANADA ! 

not the man whose only claim to distinction is that 
he made a happy choice of parents. 

The conviction is forcing itself on thoughtful 
observers, that the past world struggle and its after- 
math is less a trial of strength between the auto- 
cratic and democratic ideas of Government, than a 
fire trial of democracy itself. The overwhelming 
opinion of the world is, of course, against autoc- 
racy, which is absolutely out of tune with the 
times. A limited population, born and educated 
under autocratic rule of a reasonably advanced 
humanitarian and orderly sort, was apparently 
prepared, or coerced, to fight for its perpetuation 
and possible extension, but victory or defeat would 
not have affected public opinion elsewhere, to any 
great extent, as to the merits of such a system. That 
it was efficient, viewed as a machine, is not dis- 
puted, but democratic people demand responsible 
institutions with all the faults inherent in majority 
rule. The world has now decided, that autocracies 
must go, not necessarily because they are inefficient, 
but because they are irresponsible. 

2. 

What about the world's democracies? Have 
they fulfilled the reasonable expectations of the 
early pioneers of liberty, fraternity and equality? 
Have they abolished sweated and child labour and 
all the other abominations of our industrial system? 
If these conditions have from time to time been 
ameliorated, has it been by the voluntary action of 
the State or by the power of organized labour fore- 



DEMOCRACY ON TRIAL 3 

ing its demands on reluctant democracy? Has 
democracy abolished the pest-ridden tenements of 
our great cities? Can, in fact, democracy show, 
that the status of the common people has been 
higher and better under its beneficent rule than it 
was in the autocratic countries we have just de- 
feated? Let us look the facts straight in the face. 
Let us also remember that democracy has, in 
some countries, abolished an hereditary aristocracy 
and has substituted therefor a plutocracy, with 
swollen fortunes made out of the sweat of the brow 
of its citizens. The aristocrat was generally actu- 
ated by the noblesse oblige principle and frequently 
rendered patriotic public services. The plutocrat, 
on the other hand, has for his own selfish purposes, 
debauched our public life and even spread the net 
of graft among the people's representatives. Are 
we the better for the change? Democracy — govern- 
ment for the people, by the people — has been on 
the job for over a century and, frankly, has it 
proven so vastly superior as a political scheme, 
that the transformation from autocracy to our 
alleged advanced system is merely a matter of 
form? Do we not detect in the liberated countries 
an ever-swelling rejection of the sort of democracy 
that has in the past satisfied our consciences? We 
apparently cannot comprehend, that any nation 
just emerging from the darkness of autocracy 
should contain any considerable element of people 
who would hesitate to adopt holus-bolus our own 
scheme of Government. Yet, it is so. And not 
alone is it so, but these new notions are not confined 



4 WAKE UP, CANADA! 

to the conquered. They are being rapidly assimil- 
ated among the conquerors. Read and digest the 
following from a speech by a Canadian at Toronto : 

We advocate the dictatorship of the people or proletariat. 
Under this creed society must be turned upside down, the 
will of the workers being imposed on the "bourgeoise," or 
ruling class. The State, as it exists today, must be de- 
stroyed, and with it must go overboard law and all the 
political institutions of the country, for we maintain that 
these exist only to oppress the poor and protect the ruling 
class. In place of the State the Bolshevist places the 
revolution organization of the workers. The first duty 
of that body is to dispossess the capitalists, take control 
of all key industries, land, mines, railways, means of postal 
and telegraph communication and the new-papers, and run 
them for the benefit of the workers and the extension of 
the Bolshevist system. The land is to be parcelled out 
and given to the peasants free of tenure. The factories 
are taken over without compensation to owners or share- 
holders, to be run by shop committees. All profits from 
whatever source are to be administered by a Central Revo- 
lutionary Committee until such time as they are handed 
over to the workers. The Bolshevists do not argue, we 
lay down a dogma that the workers at all costs are supreme, 
and to attain this end all means are justifiable. . 

And thus the Bolshevist is endeavouring to create 
a limbo large and broad, since called "The Para- 
dise of Fools." 

3. 

The conflict of arms in the cradle of modern 
civilization has mercifully ceased. But where 
heroes have gallantly spilled their life blood in 
defence of all that makes life sweet and desirable, 
drivelling anarchy is rearing its leering, vacant 
face. Frightened Europe stands aghast. History 
records no precedent. Has the world been deliv- 



DEMOCRACY ON TRIAL 5 

ered from the madman of Potsdam only to be 
handed over to, and be destroyed by, a wild beast, 
nursed unaware at her own bosom? Is such a fate 
the inexorable doom of mankind? Lies here the 
secret and mainspring of destroyed ancient civil- 
izations? 

The world was prepared for far-reaching social 
changes, brought about in the orderly, conventional 
and constitutional manner to which nations had 
been accustomed under our highly organized 
scheme of life. But the wanton destruction and 
bloody orgies of the Maximalist on his westward 
march in Europe, have impressed all mankind with 
a feeling of utter horror and fear of the spreading 
of this social plague to peaceful spots, that have 
hitherto been thought secure against the bloody 
doctrine of the "long-haired man and the short- 
haired woman." 

Has the death knell of Europe sounded? Will 
the long talons of anarchism grip her by the throat 
and destroy her civilization? Shall we, on this 
side of the Atlantic, wholly escape the taint of the 
dismal creed? These are questions which every 
thinking man is asking during this unstable period 
in the world's history. European countries are at 
a disadvantage. Eighty per cent, of the people 
have little or nothing to lose in any violent social 
upheaval. The remaining twenty per cent, own it 
all. Those in the former category may be tempted 
to try any creed, any experiment, and, moblike, be 
carried away by it. 

Let us not, however, for a moment imagine that 



6 WAKE UP, CANADA! 

Bolshevism is something copied from a comic 
opera, — that there is no rational, dominating idea 
behind the seemingly crazy performances of the 
adherents of this new and extraordinary creed. If 
there were not, it would simply subside by its own 
efforts and might properly be treated as an un- 
usually widespread outbreak of lunacy. What is 
it? In conversation with a gentleman, an Amer- 
ican, recently returned from Petrograd where he 
had occupied an official position in behalf of his 
own country, he expressed to the writer his utter 
lack of sympathy with the much persecuted bour- 
geoisie of Russia. It was bad and reactionary to 
the core. He was most pessimistic about the whole 
political prospect in that country. He was appar- 
ently convinced, that the elements of true democ- 
racy were not in the bourgeoisie of Russia and 
could not be instilled into that class. Their point 
of view was utterly and hopelessly at variance with 
that of the humbler classes. 

This statement tells its own story. The Maxim- 
alist has no intention of spending a century or two 
in educating the classes. His creed is death and 
destruction and the rearing of a new structure of 
State on the ruins of the old order of society. It is 
inhuman and cruel, but there is method and pur- 
pose in the seeming madness. It is devoid of all 
the finer instincts and lofty aspirations of our mod- 
ern civilization; it is ruthless and it is relentless; 
it is something we never pictured even in our most 
horrid night-mares. It is a world scarlet with 
blood and fire! 



DEMOCRACY ON TRIAL 7 

4. 

On this side of the Atlantic we may escape the 
rocks and reefs of the older civilizations of Europe. 
In Canada and the United States, while individual 
fortunes may in many cases be enormous, the rank 
and file are not devoid of property. Two-thirds of 
the farmers in the United States own their hold- 
ings. In Canada the proportion is much greater. 
In the smaller towns and cities the labourer fre- 
quently owns his home. The future holds greater 
promise over here. The industrious bricklayer of 
to-day is often the successful contractor of to-mor- 
row. Such conditions are unfavourable to violent 
reconstruction. They are not necessarily unfav- 
ourable to far-reaching social reform. 

If we in Canada escape the doom of the countries 
of Central Europe, let us, in all humility, confess 
our past sins of omission and commission, and 
determine to use our talents in a manner more 
worthy of the destiny of this great virgin country, 
that the Almighty has handed over to us in trust 
for future generations. We are only the builders 
of the foundation. Let us see that it is so laid that 
the finished structure, founded on solid rock, may 
one day rear itself proudly against the sky to the 
admiration of all nations. Our responsibility is 
great, almost as great as our opportunities. May 
we do justice to them ! 

If Bolshevism devoured us, it would be perhaps 
only retributive justice for a century of soft living, 
of selfish ambitions, of grinding poverty here and 



8 WAKE UP, CANADA! 

ostentatious luxury there; the prostitution and 
caricaturing of the stage, "jazz band" music, our 
lascivious, erotic literature, and monstrous, degen- 
erate modern schools of art, of forgetting to be 
"our brother's keeper" — of general failure to use 
our new-found political liberty in the interests of 
humanity, education and arts, and of misusing it 
for the promotion of private greed and in riotous 
living. 

Democracy has been pulled up with a sharp 
turn. Democratic Europe has heedlessly pro- 
ceeded on its way, lulled and soothed into foolish 
security by the comfortable conviction that all was 
well. Were they not in Great Britain, for instance, 
good citizens of a free country? feut democracies 
built on a social system that has rendered it possible 
for a few to accumulate fabulous fortunes while 
multitudes have lived in misery, tilth and starva- 
tion — a social system that has given into the hands 
of the few, however deserving, hard working and 
superior they may be, the ownership or steward- 
ship of all the things that represent power over the 
fate of the majority — a social system which, by 
virtually denying the average man a stake in the 
community, has gradually produced a proletariat 
devoid of all sense of responsibility for the main- 
tenance of the existing order — such a democracy, I 
say, is perhaps in greater danger of utter annihila- 
tion than the vilest of autocracies. It rests not on a 
solid foundation, but on a veritable volcano. 

Rational human beings, however extreme their 
views, are not sighing for the day of absolute social 






DEMOCRACY ON TRIAL 9 

and material equality. Only the distorted mind 
can picture a race cast in a uniform mould — physi- 
cally and intellectually. But the democratic 
nations of the world, including Canada, must 
approach equality of opportunity much — very 
much — closer than they have in the past. If we 
cannot find the way or cannot rise to the sacrifice 
— God help us all and our democracies. Short 
will be the shrift! 

Individual benevolence by the possessors of 
swollen fortunes — restitution to society — will not 
meet the case. The breadwinner is clamouring for 
steady employment and for protection against the 
economic consequences of illness, accident and 
death. He asks for bread and he is given books — 
libraries of them! These things cannot be remedied 
by a gradual process of compassionate voluntary 
effort; nor even by wholesale disgorging. The in- 
dividual citizen of the most ideal democracy stands 
revealed as a selfish, grasping, predatory animal. 
We must, in fact, be protected against each other. 
It is primarily a job for State treatment. 

The gradual development, among the nations 
of the world, of all the vices and evils to which 
ancient Rome ultimately fell a victim, is not a 
pleasant retrospect. In the larger cities of Canada 
and the United States, where the social unrest is 
most noticeable, the past twenty years have been a 
period of "easy" money, and reckless, offensive 
spending. Business men have developed wolfish 
instincts. Many of our statesmen — the noblest 
calling of all — have degenerated into "practical" 



10 WAKE UP, CANADA! 

politicians. The gratification of social ambition 
has been, amongst our women of the "classes," one 
of the main objects in life, with the aping of the 
habits of the very wealthy and so on down the list. 
The showy "front" has been a subject of emulation. 
The expenditure on personal adornment must 
surely have made our grandmothers turn in their 
graves. And our smart establishments! The mod- 
est carriage and pair has been replaced by fleets of 
expensive motor cars. Haughty, pale-faced 
children, who would be vastly benefited by fresh 
air and healthful exercise, are carried to school in 
luxurious limousines with uniformed chauffeurs, 
passing the offspring of the mechanic, trudging 
through the snow, and casting envious eyes on these 
darlings of fortune. 

Let us offer up devout gratitude, that grim war 
at last stepped in and laid its heavy hand upon our 
heedless society, spurred us to action, and brought 
out all that was best and noblest within us. The 
social butterfly went to work. The spendthrift 
stopped spending. Weary years of ceaseless worry 
and heavy responsibility opened our eyes to the 
worth-while things in life. We see and read more 
understanding^ now that the spirit of charity and 
toleration has descended upon us. We realize that 
there is enough and plenty in this good old world of 
ours, so that we may all have the necessaries of life 
and some of its comforts and luxuries. And many 
of us even dimly perceive, that we all came naked 
into this existence, whether in cottage or mansion, 
and will leave it in the same condition; that no 



DEMOCRACY ON TRIAL 11 

class among us is God's chosen — a peculiar people ; 
but that we are all just very ordinary, average, mis- 
erable sinners, whose duty and privilege it is to 
wander through life, lending a hand to help the 
weaker brother over rough places, faithfully per- 
forming our allotted tasks and, finally, making our 
exit, dwelling in our last moments with satisfaction 
only upon the sum of our services to others. Upon 
our ability to see these things clearly may depend 
our future status as a nation. 



At this period, the whole scheme of democratic 
government seems to drift between Scylla and 
Charybdis. During the past decades, nations have 
apparently progressed farther in the field of poli- 
tical freedom than in education and fitness for the 
great responsibilities incidental to citizenship in 
the ideal democracy. It has been well said, that 
the step from pure democracy to tyrannous autoc- 
racy is surprisingly easily made. The proletariat 
calls out loudly for the inauguration of the Social 
State. It is mistakenly being regarded as synonym- 
ous with the widest political emancipation, with 
which it has absolutely nothing to do. They have 
it in Russia. How do you like it? Wherein lies 
the difference between Kaiser Wilhelm and Trots- 
ky? Bismarck has often been characterized as the 
most advanced and practical socialist of his time. 
And he was. Germany had unemployment insur- 
ance and all the rest of it. It was almost a social- 
ized state — and yet a nation of abject, cringing 
slaves. 



12 WAKE UP, CANADA ! 

This idealization of the socialized state has 
become a menace to civilization. We do not seem 
to comprehend, except in the haziest manner, that 
consistent socialization is absolutely incompatible 
with individual liberty of action, the boon most 
highly prized by the true democrat. We see it 
clearly demonstrated all around us. The multi- 
plication of Government functions, promoted 
largely by our tendency towards the socialized 
State, is rapidly driving our modern democracies 
into tyranny. We are denied, right and left, the 
basic privilege of self-determination — the very 
cornerstone of President Wilson's fourteen points 
now accepted by the Peace Congress at Versailles. 
The whole continent of America has recently been 
driven into a policy of prohibition of the use of all 
intoxicants, by the action of the State. I express 
no opinion on the merits or demerits of the policy 
itself; I am criticizing only the underlying prin- 
ciple. The "Verboten" sign is becoming an in- 
creasingly familiar and conspicuous spectacle 
within democracies. 

This complete surrender of self-determination 
and individual liberty, which is involved in the 
socialized State; this submission to being dry- 
nursed and shepherded from birth to death by a 
paternal governmental authority; this smug whole- 
sale insuring against all the calamities and vicis- 
situdes of life; this tender shielding and guarding 
of the individual from all the temptations that be- 
set red-blooded men and women — what sort of a 
race of human beings will it breed? Shall we not 



DEMOCRACY ON TRIAL 13 

lose all our powers of initiative and foresight, our 
capacity for fighting, bravely and manfully, against 
the odds and evils of life? Shall we not become a 
nation of hypocrites, secretly breaking irksome 
restrictions? Shall we not finally become imbued 
with a contempt for all laws as a result of failure 
to rigidly enforce some of them? In a measure 
we are deliberately attempting to circumvent the 
operation of the eternal law of the survival of the 
fittest. We are trying by Act of Parliament, to 
prevent the weakling from utterly destroying him- 
self, and every time he discovers a new way of 
attempting it, which he inevitably will, we pass a 
new Act of Parliament! Is there no longer within 
us any response to the spiritual appeal? Have we 
not reached the point in democracy when the prin- 
cipal business of the State appears to be to busy 
itself with our petty vices? The fate of great 
political parties ought not to hang on such issues. 
And now we are promised a crusade against cigar- 
ettes, two per cent, beer and cent-a-point bridge! 
Is this the higher civilization? 



CHAPTER TWO 

CANADIAN NATIONALITY 
1. 

CANADA is a country of dual language and 
dual nationality. Under the terms of Confed- 
eration, certain rights were guaranteed the French 
Canadians in respect of the official use of the 
French language. That fact seems to worry a 
great many people. A literature has grown up 
around this question, and some otherwise sane 
people seem to see in this equitable, fair and highly 
satisfactory arrangement, a menace to Canada and 
a brake on progress. It never seems to occur to 
these people, that the situation is very far from 
unique. Belgium has two languages, Switzerland 
has three. Every country in Europe has dialects 
almost as strange as a foreign tongue. I have met 
at least one Welshman, born and bred on the tight 
little island, who could hardly speak a word of 
English. Certainly, if we have a language prob- 
lem it can only be due to narrow prejudice, bad 
management, and unscrupulous political agitation. 
It seems almost superfluous to state the fact, that 
a strong, virile nation can be successfully created 
out of peoples speaking different tongues. In many 
ways a dual language is very advantageous or could 
be made so. If every child in Canada spoke Eng- 
lish and French with equal fluency, the country 

(14) 



CANADIAN NATIONALITY 15 

would unquestionably be the gainer. Art, liter- 
ature and general culture, would be immeasurably 
promoted to the vast benefit of us all. Amalgama- 
tion of tribes and races into nations is a process 
that has been going merrily on as far back as 
recorded history is available. On the surface, 
there seems to be nothing particular to worry about 
in our case. The thing is to study each other's 
point of view, to be mutually sympathetic and, 
above all, to practise courtesy and toleration. 

The English Canadian has no particular quarrel 
with his French brother. One can scarcely dignify 
the impatience and intolerance at times plainly 
exhibited by both sides as a racial quarrel. I am 
referring now to the average citizen and not to the 
comparatively small number of English speaking, 
bigoted Protestant agitators, who are not in any 
sense representative of average public opinion. 
The English opposition to dual-language is rather 
one based on certain very practical objections. The 
dual-language is simply regarded as an intolerable 
nuisance, and as an exceedingly expensive and un- 
necessary nuisance. Public records have to be 
translated and printed in both languages, in most 
cases, quite as a matter of form and with no prac- 
tical benefit to anyone. Official correspondence 
must be conducted in both languages. I well 
remember the perennial question by the solitary 
French member of the old Territorial Assembly 
as to whether the proceedings of the House would 
be published in French and the Premier's grave 
reply, to the effect that the Federal authorities had 



16 WAKE UP, CANADA! 

not seen fit to provide funds specially for the pur- 
pose! The French are very persistent. 

Canada is quite satisfied that Quebec should be, 
and should remain, a French province, but the 
people of Ontario and the West are naturally loath 
to encourage language complications. It seems 
absurd to them, that a small minority should so 
persistently endeavour to impose its views on a 
vast majority and, when not completely successful, 
assume the martyr attitude. There is, of course, 
intolerance on both sides, but the French would 
perhaps be well advised to accept reasonable com- 
promise instead of standing out for the whole 
pound of flesh. If the Province of Quebec has not 
retaliated, within her own boundaries, it is very 
much to the credit of the French element there. 
Their attitude should be a lesson to the other prov- 
inces. 

It is not quite fair to compare conditions in 
Danish Schleswig and German Poland with those 
prevailing in Canada as I have seen done. Ger- 
many prohibited absolutely the use of the native 
tongue at all public meetings and also adopted a 
ruthless policy of persecution and deportation. 
Those were the main grievances. I have yet to 
hear, that any obstacle has ever been placed in the 
way of the use of the French language anywhere in 
Canada or any oppressive, or coercive, measures 
adopted to force French-Canadians to use the Eng- 
lish tongue. They can talk French at any time to 
their hearts' content. Also, there is no objection to 
private or church schools in Canada teaching in 



CANADIAN NATIONALITY 17 

any language they desire. That was not the case 
in Schleswig or Poland. 

We also have a school question in Canada in- 
timately related to the language controversy. We 
have always had a school question. Our politicians 
would be lonely without it. The French are 
Roman Catholics and want religious instruction in 
the schools. We Protestants do not. But per- 
haps we are wrong. I, for one, rather think we 
are. The French can do as they like within Que- 
bec and they do it. But Mother Church follows 
the "habitant" across the border into other prov- 
inces and claims the same privileges, and then the 
fat is in the fire and the fight begins. It is disturb- 
ing, but after all it is very parochial. We are apt 
to lose our sense of proportion. The fate of em- 
pires does not hang on such issues. 

The war brought the controversy into the lime- 
light as a national issue. French Canada would 
not play the game. One pretext after the other was 
urged in support of this attitude, with every reason 
except the true reason, which is, that Jean Baptiste 
is not a fighting man. He is essentially domestic, 
and the spirit of adventure does not exist in the 
present generation of French-Canadians. Leave 
his aged mother, or his wife and children, and go 
across the ocean to offer up his life for a principle, 
and a dollar and ten cents a day? Did one ever 
hear of such madness? When conscription was 
delicately hinted at, the French press went into 



18 WAKE UP, CANADA! 

hysterics. Rapine and rebellion, battle, murder 
and sudden death would be the inevitable answer 
in Quebec. The streets of the cities would flow 
with the blood of the oppressors. When the order 
ultimately went into effect, Jean, like the simple, 
decent, law-abiding citizen that he is, came into 
the fold like a lamb and cheerfully went to the 
Front. That is, any stray Jean who had been 
utterly unable to satisfy a very, very complaisant 
board that he really ought to be exempted, which 
he, by the way, seldom failed to do. 

French Quebec's contribution towards winning 
the war was, therefore, not conspicuous. The 
French-Canadian units that went across, however, 
covered themselves with glory, as the entire 
French-Canadian population would doubtless have 
done, had it been there. The fact of the matter is, 
that the habitant, the real French-Canadian, lives 
in a sixteenth century atmosphere. Quebec is his 
country, and Monsieur le Cure is a deputy god. 
Great Britain and France actually mean no more 
to him than Nova Scotia or Saskatchewan — and 
that is nothing at all. The Province of Quebec 
should really educate this man and make a real 
citizen of him. There is no better raw material 
anywhere. 

In the meanwhile, let there be no illusions in 
this matter. The guttersnipes and sweepings of 
the slums of Montreal, even the ranting college 
professors, hysterical politicians and radical news- 
paper editors of the French element, do not repre- 
sent French Canada. We are apt to think they do, 



CANADIAN NATIONALITY 19 

and they think so themselves, but they really do not. 
Even Ottawa, which ought to know better, trem- 
bled before these men. No national question what- 
ever could be decided without deep consideration 
as to how Quebec would take it. The small group 
of French-speaking Ministers was always able to 
block any plan or policy, no matter how meritor- 
ious, by a mere intimation that Quebec would not 
like it. The cabinet soon became frightened at its 
own shadow. It was almost completely dominated 
by this element. In course of time, the French 
Ministers and members naturally began to take 
themselves seriously. The balance of power de- 
pended on Quebec. No government could lightly 
ignore this situation. 

But the last election broke the spell. Canada 
has now found out, that she can get on comfort- 
ably, practically without French representation in 
the cabinet. Rebellion did not break out, nor 
famine visit the land. Now apparently it does not 
matter a row of pins how Quebec takes anything, 
which is precisely the mental attitude that is best 
for Canada, especially for Quebec. No single 
province will ever dominate Canada again. It is 
unhealthy. 

I have great hopes for the future of that splen- 
did race. They are god-fearing, hard-working and 
law-abiding people, reasonably prosperous, very 
contented, and faithful to the command of their 
church to people the earth. Why is it, that the 
Roman Catholic church, for which I personally 
entertain the deepest admiration, respect and 



20 WAKE UP, CANADA! 

regard, never can quite forget the old days of 
temporal jurisdiction? Why must it always either 
occupy the throne or be the power behind the 
throne? Look at Quebec, look at Ireland. It is a 
pity, that this venerable, hoary institution, that has 
emerged triumphantly from the ashes of every wild 
holocaust the world has ever witnessed, cannot 
learn to confine its activities to the spiritual and 
moral elevation of its adherents, and leave poli- 
tical intrigue and strife to less worthy agencies. 
Perhaps it is because this great organization cul- 
tivates the martyr spirit. The Roman Catholic 
church is said to thrive on persecution. The wish 
may be father to the thought. It is seldom diffi- 
cult to find a grievance when one looks for it. 



I am not in the least disturbed about the so- 
called "French menace" in Canada. We are now 
busy with reconstruction and cannot afford to waste 
time speculating on any remote possibilities in that 
direction. I am more concerned about the general 
question of Canadian nationality. We are in a 
curious, anomalous position from a national point 
of view and it is sometimes difficult to see whither 
we are drifting. If ever a country needed the 
development of the most vigorous sense of nation- 
ality, it is surely Canada, and at the present 
moment. Alien races are reaching our shores in 
ever-increasing number. Americans are coming 
across the line into Western Canada by the hun- 
dreds of thousands. These must all be assimilated. 
Into what? 



CANADIAN NATIONALITY 21 

In the United States they have faced precisely 
the same problem. But the United States is a 
nation with a flag. It is a compact, definite, national 
unit with a history and traditions behind it and 
with an intense patriotism and pride of country 
pervading all classes. There is no divided or dual 
allegiance. An American is an American. 

Canada, on the other hand, is the dutiful and 
admiring daughter of the greatest Mother of 
Nations. The flag is Mother's. Ask an English- 
born citizen, who has perhaps spent many years in 
Canada, whether he is a Canadian, and he will 
smile. He is, of course, an Englishman or a Brit- 
isher. Ask a New Zealand born colonist in Canada 
as to his nationality and he will reply that he is a 
New Zealander. A foreign-born, naturalized 
citizen may tell you that he is a Canadian. But 
without further formalities he is not a Britisher. 
Only a small fraction of native Canadians ever 
visit the shores of Great Britain. It seems that we 
are endeavouring to cultivate in Canada a sense of 
dual-nationality. Our status is beclouded and in- 
tangible. Can we readily assimilate foreign 
populations on such a basis? By reason of her 
geographical situation, Canada only, of all the 
British Dominions, faces this problem. It is worth 
speculating upon. 

The component parts of Canada have had to 
shift local allegiance. People in the Pacific Prov- 
ince were British Columbians up to the seventies. 
Then they became Canadians. They were always 
Britishers. Many of them even now fail to realize 



22 WAKE UP, CANADA! 

that they are Canadians. They refer to residents of 
other provinces as "Canadians." 

We value most highly our British affiliation and 
would be loath to disturb such an admirable family 
relationship. But it seems clear, that a more dis- 
tinct sense of Canadian nationality must be devel- 
oped amongst us, sooner or later, or we shall partly 
fail in our mission to provide homes for multitudes 
from overseas and elsewhere. We cannot be satis- 
fied with the position of a "polyglot boarding- 
house." We must either keep strangers out, or we 
must assimilate them. There must be no half 
measures. 

Australia and New Zealand are islands remote 
from other civilizations. In South Africa, British 
influence predominates. Canada lies north of her 
gigantic cousin, speaking the same language, read- 
ing the same books and newspapers, seeing the same 
plays. Our world news filters in through the neigh- 
bour's cables, our motion pictures made in Cali- 
fornia and New Jersey invariably display the stars 
and stripes when patriotic situations demand a flag. 

The International Boundary is an invisible and 
intangible thing. Trade may be controlled, but 
ideas cannot be excluded. Owing to the geog- 
raphical situation it is almost inevitable that 
schemes of social reform in the two countries will 
go hand in hand. The United States will prob- 
ably lead, and we shall follow the lead, as we have 
consistently done in our war administration. We 
are tied together with invisible bonds in a hundred 
different ways. 



CANADIAN NATIONALITY 23 

The influence exercised by the United States in 
Canada is by no means solely intellectual and 
spiritual. There is also a certain, well-defined 
administrative influence making itself felt. For 
instance, the attitude of labour towards industry in 
this country is practically dictated from south of 
the line. Canadian labour organizations are "inter- 
national," which merely means, that United States 
bodies extend into Canada and dominate the situa- 
tion. Whether Canadian labour may or may not 
strike is determined south of the line. I am not 
criticizing this arrangement. It is most efficient, 
but I doubt whether there is another country in 
the world in this unique situation. 

We live on the very best of terms with Uncle 
Sam. We admire him and like him and we see a 
great deal of him and his people. Above all, we 
welcome them to our country as settlers, with open 
arms. But the thought often occurs to me, that 
only a strong, virile people with the sense of nation- 
ality passionately developed, can hope to with- 
stand this tenacious, unswerving, but wholly un- 
conscious and unorganized process of absorption 
that goes on, night and day, year in and year out. 

Since peace negotiations were initiated, an im- 
portant precedent has been established. The world 
status of Canada and other British Dominions has 
been defined. They were admitted to the Peace 
Conference as small nations. It was a step in our 
constitutional evolution. The British Empire 
"just grew." It has no organization or written con- 
stitution. It does not understand itself and, there- 



24 WAKE UP, CANADA! 

fore, we cannot expect other nations to understand 
us. But it seems reasonably clear to me at this 
moment, that the future unfolding of this great, 
unwieldy British Empire must be primarily along 
the lines of a distinct and intense national develop- 
ment on the part of each self-governing unit, with 
a central, authoritative body, only as yet dimly 
visible, where each Dominion meets as an equal 
partner. The present relation of mother and 
daughter would then be converted to sisterhood. 



CHAPTER THREE 

POLITICAL PARTIES AND CLASSES 

1. 

THE present political line-up in Canada is 
purely the result of an "armistice." The 
Unionist party now in power was placed there to 
"win the war." The war is won. Neither party 
has at present any constructive programme beyond 
this point, which perhaps is the most promising 
feature of the situation. It enables the Government 
to follow the lines of least resistance and to develop 
a programme as it goes along, irrespective of pre- 
viously expressed opinions or platforms. These 
are by common consent scrapped. If Canada can 
proceed with a reconstruction programme, formed 
day by day, on the merits of the situation, without 
being stampeded into premature, half-baked 
policies, by pressure from the Opposition and the 
public generally, and if the present Government 
can show evidence of tackling our problems in a 
statesmanlike and progressive manner, then we are 
safe. Such a situation however, requires the co- 
operation of the opposition to be entirely success- 
ful, and in view of the manner in which the game 
of politics has been played in the past, this is per- 
haps too much to expect. A wise opposition might, 
however, see much to instil hope of an early occu- 
pation of the Treasury benches, in view of the 

(25) 



26 WAKE UP, CANADA! 

thankless task of dealing with all the complicated 
problems of demobilization and reconstruction, 
which now confronts the Government. It is per- 
haps doubtful whether any body of men can survive 
this task politically. 

Up to the outbreak of the war, political parties 
in Canada had for many years been fairly sharply 
grouped as Conservatives (Tories) and Liberals 
(Grits). Various attempts were made from time 
to time, to create groups of so-called "independ- 
ents," but without any very conspicuous success. 
These third parties, or sections, generally died a 
natural death after more or less meteoric careers, 
frequently upon the elimination from Parliament, 
by death or defeat, of the guiding spirits in the 
movement. 

The present political situation in Canada is 
absolutely chaotic. Old affiliations have been ruth- 
lessly sundered, new problems of public adminis- 
tration are arising almost daily and the time, of 
course, is inopportune for the construction of per- 
manent political platforms, around which the vot- 
ers might rally, according to their convictions. 
The whole political horizon is, to say the least, 
obscure. Class organization is proceeding with 
rapidity, and political views are slowly crystalliz- 
ing. For the first time in the history of Canada, 
there is a distinct tendency towards the multiplica- 
tion of political parties on a basis of organized 
effort. Class consciousness is unmistakably devel- 
oping in Canada and will, of necessity, exercise a 
tremendous influence upon the political situation. 



POLITICAL PARTIES AND CLASSES 27 

The old pattern politician refuses to view the mat- 
ter seriously. The party-hack expects history to 
repeat itself, but those who have their "ear to the 
ground" realize that the day of the "ins v. outs" 
is gone. 

It is, of course, impossible to forecast the future 
of political parties in Canada, with "old-line" 
ideas and parties as completely disorganized as 
they are at present. Nothing short of a complete 
new line-up would impress the ever-growing 
volume of critical and independent opinion. Both 
of the old political parties stand condemned at the 
bar of public opinion — the Liberals for brazen 
faithlessness to pre-election promises, and reckless 
administration when in power — the Conservatives 
for lack of vision, a stupid disregard of public 
opinion, and subserviency to powerful influences. 
A good example of crass stupidity is the very use 
of the name "conservative" for fifty years. Who, 
in this progressive country wants to be labelled 
"tory" or "reactionary"? Fancy asking a new- 
comer in the West whether he is going to cast in 
his political fortunes with the liberals — the reform- 
ers and progressives, or with the tories, the reac- 
tionaries! 

2. 

The most far-reaching class organization is un- 
doubtedly the "Grain Growers" or "Farmers' 
Union" movement. This had a modest beginning 
in 1899 in the then North-West Territories. Since 
then it has spread all through the Prairie Prov- 



28 WAKE UP, CANADA! 

inces and also to Ontario. The strength of this 
movement lies in the very fact, that it has not been 
developed for political, but primarily for business 
purposes. The former is purely incidental. This 
means, that the membership is tied up to the organ- 
ization by motives of commercial self-interest, and 
as the organization has so far been an outstanding 
success from a business point of view, it rests on 
a vastly more solid foundation than that of a mere 
political body. This organization is, therefore, 
one distinctly to be reckoned with in the future. 
And it has views — most uncomfortable views for 
any political party that looks for support among 
the industrial classes of Canada, particularly those 
of Ontario and Quebec. Its pronouncements on 
public questions are frequently intolerant, uncom- 
promising and extreme. One sometimes detects 
traces of internationalism and socialism in its 
debates and utterances. But the scatterbrains are 
gradually being eliminated and wiser counsels will 
ultimately prevail. 

The farmers of Canada, representing as they do, 
the largest class of property owners in the Domin- 
ion, will doubtless recognize, sooner or later, that 
their true interests lie in promoting safe and sane 
conditions, and that they are diametrically op- 
posed to experimental legislation and all the poli- 
tical and social nostrums that so-called advanced 
thinkers are now endeavouring to incorporate in 
their platform and propaganda. The trouble in 
the past has been that the movement has been 
largely in the hands of idealists and enthusiasts, — 



POLITICAL PARTIES AND CLASSES 29 

honest and well-meaning men, but lacking balance 
and political perspicuity. A change already in 
progress may be looked for in the radical views 
that now seem to prevail among the leaders. 

Another and most important political factor is 
of course, that of organized labour. While this 
class only numbers about 160,000 members in 
Canada, or, approximately, 20% of all Canadian 
workers, skilled and unskilled, the movement is 
exceedingly well organized and widely distributed 
throughout Canada. The platform of organized 
labour is frankly international and socialistic, 
although not officially so, as far as the latter is con- 
cerned. Organized labour has always been a factor 
of weight in Canadian politics, but no separate 
political party has ever been formed to represent 
this class. What the future has in store in this 
respect is doubtful. It is certain, that organized 
labour has in the past exercised a far more power- 
ful influence on legislation, acting through accred- 
ited leaders, than could have been the case if direct 
representation in Parliament had been sought. It 
is possible, that the same policy may be followed in 
the future, but there are indications of a desire to 
form a labour party. There have, of course, been 
local attempts made to run labour candidates in 
Dominion and Provincial elections and in many 
cases they have been successful, but the organiza- 
tion, as a whole, has lent no active official support 
in such cases. 

It is curious that Canada has almost entirely 
escaped class representation in its popular legisla- 



30 WAKE UP, CANADA! 

tive bodies. Various countries in Europe have for 
years had agrarian parties to safeguard the inter- 
ests of agriculture and the land-owning classes. 
Even if the labour element in Canada delays action 
in respect of the formation of a political party, an 
agrarian party is bound to come, sooner or later. It 
will probably have its origin in a widespread de- 
mand on the part of Canadian farmers for parlia- 
mentary representation within existing parties, 
from among their own class. Once any consider- 
able body of such men is elected and gets into 
intimate and constant touch at the Dominion and 
Provincial capitals, the demand for a separate 
party organization will automatically arise. 

A comparatively new element has been projected 
into politics during recent years, namely, the 
woman voter. Party managers are very much at 
sea as to the outcome of it all. It is a great experi- 
ment. The womanhood of Canada now has an 
opportunity to assist in "cleaning house," politic- 
ally, and in driving everything unworthy from 
public life; an opportunity such as has never 
occurred in the country's history before, and prob- 
ably will never occur again. The moment is 
psychological. The women of Canada should be 
able to approach our problems with unbiassed 
minds. They have only to a small extent been 
active in, and influenced by, partisan politics. They 
should carefully study the situation before affiliat- 
ing with any party. Canada's intelligent women 
can with advantage copy their sisters in Great 
Britain, and take a keen interest in all public ques- 



POLITICAL PARTIES AND CLASSES 31 

tions. This is most noticeable across the sea, and 
contributes much to the delight of English home 
life. The record of the woman voter in the recent 
British general election and the apathy of our 
Canadian women in connection with exercising the 
recently conferred franchise, make an unfavour- 
able comparison. 

The country has a right to expect from its women 
an uncompromising attitude with regard to purity 
of public life, and sympathetic consideration and 
support of all rational policies that will promote 
the greatest good of the greatest number of our 
citizens. The women of Canada should acquaint 
themselves with public questions, and should 
regard the franchise as a sacred trust, exercising it 
with a sense of great responsibility. 

3. 

An analysis of the occupations of that section of 
Canada's population engaged in useful employ- 
ment and of the members of our legislatures, is of 
considerable interest as showing the degree of class 
consciousness prevailing in Canada. It may be 
accepted as a principle, that irrespective of poli- 
tical affiliations, each class is most effectively repre- 
sented and its interests protected by representatives 
selected from amongst its own members. The 
notorious preponderance of lawyers in public life 
in Canada is very curious. The superstition seems 
to prevail, that this class is, in some way, specially 
qualified for public life. This is open to the 
strongest possible doubt. Apart from the general 



32 WAKE UP, CANADA ! 

educational qualifications, and it must be admitted 
that the average lawyer is a well educated man, 
lawyers as a class are not endowed with more than 
average business qualifications, — in fact, many 
claim that the average lawyer is not a good business 
man. The drafting of legislation is not a task about 
which the private member of a legislative body is 
much concerned. This is generally done by 
technical men, experts in that particular work. The 
private member is only called upon to consider the 
necessity for any legislation submitted to Parlia- 
ment in the shape of a bill, and to criticize such 
measure, which is a business and administrative 
question and not at all a question of law. It is 
well to keep these points in mind. It is high time 
the Canadian voter elected men of his own class to 
represent him in our Parliaments, always, of 
course, having in mind the vital necessity of sup- 
porting only candidates with sound views on lead- 
ing questions, and of fair educational attainments. 
The following table showing occupational statis- 
tics of workers in Canada, male and female, has 
been compiled from various sources of informa- 
tion, principally from the last Dominion Census 
Report. Accuracy is not claimed for these figures, 
but they are sufficiently correct to form the basis 
of a study of the subject: 

Workers in Canada Male and Female 

(1) Farm Workers: 

Farmers 933,735 

Their wives 625,734 

Total 1,559,469 



POLITICAL PARTIES AND CLASSES 33 

Workers in Canada Male and Female 

(2) Mechanics and Labourers: 

Manufacturing 442,208 

Building Trades 246,201 

Forest and Fisheries 76,726 

Mining 56,490 

Transportation 195,789 

Domestic Help 214,012 

Total 1,231,426 

(3) Executives, Clerical, 

Professional and Commercial: 

Manufacturing 49,134 

Public Administration 76,604 

Mining 6,277 

Professional 120,616 

Transportation 21,755 

Merchandising, wholesale and 

retail 283,087 

Total 557,473 

Grand Total 3,348,368 

The wives of farmers have been included in that 
class, as they are practically farm workers, supply- 
ing meals for the help, feeding poultry and most 
frequently assisting in other farm tasks. Broadly 
speaking, the above is an approximate classification 
of the voting strength of Canada. Married women, 
not of the farm, 625,734 and widows, 179,656, may 
be added to complete the list. 

This approximate census of Canadian voters is 
divided into the three conventional classes, namely, 
the farmer, the labourer, and the professional and 

2 



34 



WAKE UP, CANADA! 



business classes — the "bourgeoisie," as the latter 
would be called in Europe. 

The following table shows the occupations of the 
men representing these groups in the Dominion 
and Provincial legislative bodies: — 

Occupations of Parliamentary Representatives in 

Canada 



— 


Lawyers 


Other 
Professions 


Merchants 

and 
Industries 


Labour 


Farmers 


Total 
Represen- 
tation 


Senate of Canada . . 
House of Commons . 

Nova Scotia 

Prince Edward Island 

New Brunswick 

Quebec 

Ontario 


24 

79 

16 

4 

11 

37 

22 

7 

5 

9 

8 


18 

47 

13 

3 

8 

16 

21 

12 

4 

11 

10 


40 
72 
27 
17 
22 
41 
43 
17 
12 
16 
22 




11 

32 

1 

6 

6 

9 

21 

10 

38 

22 

5 


94 

231 

57 

30 

48 

103 

107 

50 


Saskatchewan 

Alberta 


60 

58 


British Columbia . . . 


46 




222 


163 


329 


5 


161 


884 



A glance at this table shows a peculiar state of 
affairs. The lawyers, numbering less than 5,000 
in the whole of Canada, and being only a fraction 
of the population, monopolize 25% of the total 
representation. Labour is practically unrepre- 
sented, while the farmer class, almost half the 
entire adult population, only have about 18% of the 
representation. There are four vacancies. 

The following comparison shows more clearly 
the existing state of affairs: — 



POLITICAL PARTIES AND CLASSES 35 

Class Representation in Canadian Legislatures 



Class 


Number 
in Class 


Percentage 
of total 
workers 


Number 

of 

Representatives 


Percentage 

of total 

Representation 


Farmers 

Mechanics and Labourers. 
Business and Professional. 


1.559.469 

1.231.426 

557.473 


465 
36'8 
16*7 


161 

5 
714 


18'3 

05 

81-2 




3,348.368 


lOO'O 


880 


1000 



It is not my intention to draw any special lessons 
or conclusions from the figures quoted. They tell 
their own story to those who think it worth while to 
study them. Public policy is generally an attempt 
at compromise. The question to be considered is 
frequently to what extent the interests of one class 
can fairly be sacrificed in favour of other classes for 
the public good. It often becomes more than a 
question of pure statistics. The fair and reason- 
able application of the principle of compromise 
may avert definite class representation, or East v. 
West. The reverse will surely lead to class war. 
Our public men should study the foregoing fig- 
ures. They tell a story all their own to the man 
who is looking for guidance and truth. 



In the political game of the "ins and outs" that 
has, until recently, been played in Canada, the 
"machinery" has been developed to a very fine 
point. Members have been given cabinet rank and 
placed in charge of important portfolios frankly 



36 WAKE UP, CANADA! 

because they knew how to play this game. The 
fact that Governments have remained in power for 
from 12 to 18 years in spite of records that should 
have consigned them to oblivion, is ample evidence 
of the fact, that means have been placed in the 
hands of the Government of the day to defy public 
opinion and to prevent a true expression of such 
opinion at the polls. There is ample evidence 
abroad, that there is a complete revulsion of feel- 
ing on the subject. Corporations now are not so 
much in evidence as they used to be and greater 
caution is needed in collecting campaign funds. 
All this is encouraging, but it does not go far 
enough. 

In the raising of party funds for the purpose of 
defraying election expenses, one comes face to face 
with graft in its most pernicious form. In the old 
days, votes sold to the highest bidder, and this bare- 
faced corruption of the electorate excited only a 
mild form of protest. The crime was largely in 
being found out. Finally it was becoming difficult 
not to be betrayed and found out, and the practice 
was almost entirely discontinued. This was not 
the result of an awakening conscience or moral 
uplift. It was purely a matter of expediency. 

Nowadays, the evil lies rather in the method of 
raising election funds than in the expenditure 
thereof. When a general election is impending, 
the party managers set to work to obtain the 
sinews of war. The hat is passed. It comes to the 
"Universal Steel Co." if there is such a concern. 
The Board of Directors makes a large subscription, 



POLITICAL PARTIES AND CLASSES 37 

and covers the payment up in its books. Why? Is 
this corporation making a contribution as a patri- 
otic Canadian concern, purely in the interest of 
good government? Or is it in anticipation of 
favours to come? It is perhaps enjoying heavy pro- 
tection under our fiscal system and desires to be 
left undisturbed. Or perhaps it has a "case" and is 
looking for an increase. In order to guard against 
all possible eventualities, however, when the "hat" 
from the opposition side comes round the next day, 
the Directors determine on a "safety first" policy, 
and make an equally large contribution. Thus 
both sides are squared. This is how it works. 

It is unnecessary to enlarge on the cruder and 
criminal arrangements under which certain sums 
are added to Government contracts to cover 
"extras" and are afterwards transferred to the 
party "slush" fund by the grateful beneficiaries. 
During quite recent years, deals of this sort, carried 
out in the rawest possible manner, have seen the 
light of day, following criminal proceedings. Let 
us hope, that these latter methods are now con- 
signed to oblivion, that we have our heads suffi- 
ciently far out of the mire to make a swift and 
effective war of extermination against any swind- 
ling group of public men who will dare to per- 
petrate barefaced stealing from the public funds 
for election or any other purposes. 



Everyone regrets the power and activities of the 
party "machine." "Machine" government natur- 



38 WAKE UP, CANADA! 

ally follows "machine" won elections. Let us 
examine the "machine," and see how it works. It 
organizes meetings, personally canvasses the voters 
and distributes, in printed form, special pleadings 
in favour of the party. This is quite legitimate. 
Then comes the election day. Now, supposing the 
machine remained inactive on that day of days? 
As a first result, we should probably get a fair 
expression of a limited popular opinion at the 
polls. But half of the voters would not vote! 

This is where the "machine" puts in its most 
effective work, in bringing the vote out to the poll. 
This saves labour — to the voter. Each "machine," 
of course, brings out the people only that will vote 
for the party it represents, and will often go to 
some lengths in keeping opponents at home. Let 
us be quite frank about it, however unpalatable the 
truth may be. The result of any election, unless 
some great public question is involved, depends 
almost entirely upon the degree of field organiza- 
tion and financial means available in bringing the 
favourable vote out on election day. Boiled down 
to its logical conclusions, it means that the average 
voter is too lazy or too indifferent to go to the poll 
unless a comfortable conveyance calls for him, 
takes him there and then brings him home again. 

Is the franchise a privilege, or a duty? This 
question goes to the root of the whole matter. If a 
privilege, those who are too indifferent to avail 
themselves of it might properly be disenfranchised. 
This would lead to an intelligent expression of 
public opinion. If a duty, everyone failing to per- 



POLITICAL PARTIES AND CLASSES 39 

form that duty, unless prevented from voting by 
some serious obstacle, should be dealt with as an 
offender. This means compulsory voting. The 
moment we had compulsory voting, the "machine" 
would be largely confined to its legitimate object, 
which is to educate public opinion to the views of 
the party it represents. The final expression of 
public opinion would thus be left absolutely un- 
hampered, and would really represent public 
opinion and not machine-made opinion. If we 
had compulsory voting and proportional repre- 
sentation, we could perhaps dispense with all the 
other innovations, and feel reasonably certain that 
the party in power, be it good, bad or indifferent, 
truly represented the consensus of public opinion. 
And that is the utmost demand that a democracy 
can make. 

We might perhaps eliminate the time element, 
and dispense with the education of the voter, and 
rudely compel him to do his duty, hoping that 
some time before the century expires, he may begin 
to see dimly, that this apparently unpleasant duty 
was imposed upon him as a means of self-protec- 
tion. Sickness or absolutely unavoidable business 
elsewhere should be the only excuses accepted for 
failure to vote. A Justice of the Peace could hold 
court after election day in each polling division 
and quickly determine the merits of each excuse. 
Disenfranchisement for a certain period, and a 
small fine, should be meted out to delinquents. This 
system would quickly break the back of "machine" 
politics. The task of going to a polling booth and 



40 WAKE UP, CANADA! 

casting a vote, is apparently no more formidable 
than to call for the mail or to take a box of eggs to 
town. 

We have certain very plain duties as citizens of 
a democracy. If we do not want to discharge these 
duties and contribute our quota towards good and 
honest government, we are unfit for the privileges 
of a citizen of a democracy. We might as well be 
in Germany, or under some other autocracy, where 
the plain citizen, as far as responsibility for good 
government is concerned, ranks with the Canadian 
minor or lunatic. A paternal Government tells 
him where to "head in." And he promptly "heads 
in." Democracy, a comparatively new experiment 
in government, is blundering along under the 
party "machine" system. Up to the present time 
it looks as if we had merely exchanged one autocrat 
for another. We have fired the "mailed fist" auto- 
crat and have adopted the "silk glove" autocrat of 
the party "machine." The former never was more 
autocratic than the latter is today. Speaking gen- 
erally, we are evidently unfit as yet for the respon- 
sibilities of democratic government. Another 
century of educating may be needed before we 
shall properly value the franchise and realize our 
duty as citizens. 

6. 

It is instructive to watch the total vote cast for 
each party in an election, and compare this with 
the number of representatives, elected, of each 
party. Generally these figures bear absolutely no 



POLITICAL PARTIES AND CLASSES 41 

proper proportion to each other. In other words, 
majority rule under the present system very largely 
eliminates minority representation. Proportional 
representation is designed to arrive at a fairer 
expression of the will of the voter at the polls. It is 
now quite possible for a political party to have a 
large majority in Parliament without actually hav- 
ing polled a majority of the votes throughout the 
country. This has happened. Such a state of 
affairs is brought about by a judicious hiving of 
opposition voters in certain constituencies, other- 
wise called "gerrymandering." This used to be a 
fine art in Canadian politics, but, while it still 
flourishes, it is not done now in quite the same bare- 
faced fashion as in days gone by. 

The principles underlying the system of propor- 
tional representation are so well understood, that it 
is unnecessary to go into detail here. One beneficial 
effect, is to prevent unwieldy majorities, and the 
consequent danger of administrative dry rot. A 
Government in power by virtue of a small majority 
only, is more susceptible to the views of its individ- 
ual adherents and also to public opinion. Propor- 
tional representation, involving very large electoral 
districts, will also practically eliminate the 
obnoxious individual canvass of each voter, for the 
reason that it would be almost impossible. To 
make quite sure, make it an offence to canvass in 
person or by agent. 

Election effort might very properly be absolutely 
confined by statute to public meetings, advertising 
and circularizing, and might equally properly be 



42 WAKE UP, CANADA! 

limited to a certain maximum expenditure per 
head of estimated voting strength of any con- 
stituency. Our present election law fairly defines 
what are legitimate campaign expenses and pro- 
vides penalties for any proven illegal expenditure 
by any candidate. If elections are too expensive, 
we keep out of public life the largest element of our 
eligible population. If we permit the candidate to 
receive help from friends and admirers, we at once 
lay him under obligations which will frequently tie 
his hands in the performance of his public duties. 
We cannot stand for any system of government 
that involves the recognition of "our friends" in 
public administration. The Government, col- 
lectively and individually, and the private member 
as well, must have a "free hand." This is a prac- 
tical question and can be solved. 

Having determined upon a basis of computing 
maximum legitimate election expenses, that is, 
such expenses as would be necessary to place within 
the reach of the average voter sufficient informa- 
tion to enable him to pass intelligent judgment on 
the proposed candidates, the State should make 
provision whereby this amount, or a part thereof, 
should be allowed to any candidate who polled 
sufficient votes to retain his deposit. Vouchers 
would, of course, be required proving the actual 
expenditure of the amount claimed. Then make 
it a criminal offence on the part of any person or 
corporation, or any director of a corporation, to 
contribute directly or indirectly, to party campaign 
funds. The average Canadian taxpayer is much 



POLITICAL PARTIES AND CLASSES 43 

too intelligent to doubt for one moment, that he can 
better afford to defray legitimate election expenses 
out of the public treasury than to have our public 
men shackled, hand and foot, by powerful 
"friends," who, in return for possibly quite incon- 
siderable gifts, expect to prey on their country and 
defeat the will of the people. 

7. 

One of the most pernicious effects of the political 
machine is the precipitation of Federal partisan 
politics into our Provincial and municipal affairs. 
Our whole system of government is, of course, 
based on the presence of, at least, two parties in the 
representative body — one to administer and one to 
criticize. But it surely was never seriously con- 
templated, that the political divisions governing 
Federal affairs should prevail in the other bodies. 
Doubtless this basis has been popularly accepted 
because it obviates the necessity of duplicating 
party "machines." In other words, the best inter- 
ests of the country are being made subservient to 
the convenience of the "machine." 

There cannot be the least doubt, that considera- 
tions of efficiency and economy demand, that there 
should not be the slightest or remotest connection 
between the political parties in federal affairs and 
in provincial administration. Provincial cabinets 
should feel that they can approach the Federal 
Government on matters affecting their provinces 
without the embarrassment that naturally attaches 
itself to dealing with men representing opposite 



44 WAKE UP, CANADA! 

political views. It creates a false position and is 
detrimental to that spirit of co-ordination and co- 
operation that ought to prevail. There is scarcely 
any limit to the useful combined work that could 
be done, and should be done, in the interest of 
general economy and good administration. 

The reconstruction period upon which we have 
now entered, will make large demands upon co- 
operation between Dominion and Provincial 
authorities. The labour and employment policy is 
founded on team work; the soldiers' settlement and 
re-establishment work likewise. Great coloniza- 
tion policies can only be worked out under joint 
control. There is every indication, that a new 
administrative era is dawning, involving the clos- 
est co-operation between Provincial and Federal 
authorities, and no such silly obstacle as political 
"machinery" should be permitted to stand in the 
way of the fullest realization of the great possibil- 
ities of such a movement. 

The electorate of Canada has something to say 
about this question and should say it. What have 
the Provincial Governments of Prince Edward 
Island or British Columbia to do with the tariff or 
the administration of the Post-Office Department? 
And what has the Federal Government to do with 
the Aged People's Home in Alberta or road repairs 
in Nova Scotia? Or, are we frankly to accept the 
situation, that a provincial government exists prin- 
cipally to thwart or promote the political fortunes 
of the Federal administration, as the case may be? 
Are we so utterly devoid of vision, that we cannot 



POLITICAL PARTIES AND CLASSES 45 

construct platforms on provincial affairs upon 
which the respective parties can stand or fall before 
the electorate? It would almost be preferable to 
divide upon church adherence, colour of hair, or 
anything, in fact, rather than to introduce Federal 
issues into our local affairs and thus prejudice 
every attempt to promote effective team work 
between the Dominion and Provincial authorities. 
The present state of affairs would be ludicrous if 
it were not vicious. 

Before leaving this subject, I specially desire to 
appeal to all classes to rigorously exercise their 
franchise in municipal affairs. The present apathy 
in this matter is absolutely appalling. The average 
man comes into contact with municipal affairs ten 
times where he encounters provincial or federal 
administration once. Surely, there is nothing more 
important than a healthy and intelligent interest in 
the management of the community within which a 
person resides. The most successful and influential 
citizens should be prevailed upon to make any 
sacrifice necessary to give the best that is in them 
to municipal administration. This is the very 
foundation of sound democracy. Without ad- 
vanced and efficient municipal government, there 
can be no lasting national progress. It would be 
like attempting to construct a building from the 
top instead of from the bottom. Besides, the muni- 
cipal council should be a sort of preparatory train- 
ing school for budding statesmen. This is the 
arena where these men might be placed on trial 
before being entrusted with wider public respon- 
sibilities. 



46 WAKE UP, CANADA! 

8. 

And a word as to the private member, federal 
and provincial. The whole system of party gov- 
ernment, involving party discipline, to some extent 
enforced by party contributions towards election 
expenses, has had the effect of reducing our 
representatives to mere voting machines. The few 
that have the temerity to strike an independent 
attitude on some great question run the risk of 
utter political annihilation. The House doesn't 
like insurrection. Of course, his opportunity comes 
in the party caucus where he can criticize to his 
heart's content, behind closed doors in secret ses- 
sion. But in broad daylight the party must vote as 
a unit, whether on one side of the House or the 
other. All this, of course, is not conducive to 
efficiency, but it is the system. In effect, the private 
member might as well return home immediately 
after the caucus and leave the detail to the leaders. 
He has become an absolute automaton. The good 
old days when governments could be defeated on 
the floor of Parliament have long ago departed. 
Our present system does not admit of any such 
eventuality. The "machine" works too smoothly. 

Electoral reform along the lines indicated in 
this chapter, would do much towards saving the 
last shreds of independence of the private member. 
The present system is absolutely demoralizing. It 
leaves no scope for individual originality or in- 
genuity. The private member attends the sessions 
of Parliament perfunctorily. He is not there to 



POLITICAL PARTIES AND CLASSES 47 

listen to argument and weigh measures in the bal- 
ance, intelligently and impartially, and act on his 
convictions as our constitution contemplated. His 
mission is merely to obey the call of the party whip 
and to vote as he is told and in general, to play the 
party game loyally. It is difficult to see how this 
evil can be entirely overcome under our system of 
party government. To elect men imbued with a 
sense of patriotic duty rather than a desire to slav- 
ishly submit to party dictation, if such men can be 
found and could be nominated, would be a further 
step towards improvement. 

Our blind adherence to political parties has 
beyond all doubt been largely responsible for most 
of the past expensive administrative blunders in 
Canada. It is, however, refreshing to note a 
healthy reaction in this respect as a direct result of 
the influence on the public mind of the Great War. 
The spectacle of the vast majority of staunch Cana- 
dian liberals cheerfully joining hands with the 
opposite party for the purpose of supporting a 
coalition administration, under conservative 
leadership, to pilot the ship of State through a 
great world crisis, is perhaps the most promising 
and inspiring in the political history of Canada. 
It clearly demonstrated that, at the core, the elec- 
torate is sound. It should be fully realized, that 
this act of self-sacrifice and self-obliteration was 
not an easy one to make, particularly for the liberal 
leaders who could not ignore the vast issues in- 
volved from a party point of view. Equally splen- 
did was the action of the liberal press, which gen- 



48 WAKE UP, CANADA! 

erally took the patriotic and public-spirited stand 
when confronted with the great decision. 

The voters of Canada are very hard taskmasters 
and our Federal representatives, at least, are en- 
titled to a tremendous amount of sympathy. The 
sitting member, who has perhaps made prodigious 
sacrifices to contest the seat and who is conscient- 
iously doing his duty to his constituents, is on every 
occasion made to feel that no mean honour has been 
conferred on him. This is true, as far as it goes, 
but there are drawbacks. If he is a professional 
man, certain "f riends" are apt to forget paying for 
professional services rendered by him. In fact, he 
would scarcely dare to send his bill. If he is in 
business, he will very likely be ruined. Charitable, 
and uncharitable organizations of every conceiv- 
able kind, forthwith commence levying blackmail. 
He cannot refuse donations. Every agricultural 
fair and sporting event in his district is made the 
occasion for a polite "hold-up." 

Is such an attitude towards the people's repre- 
sentative dignified and fair? There will always be 
the deserving "party worker" to relieve our mem- 
ber of his spare cash. But should organized bodies 
of citizens descend to such sordid "stand and 
deliver" measures to raise funds for charitable and 
other purposes? Let us elect worthy men to repre- 
sent us and, having done so, refrain from making 
their lives a burden to them. As it is, the best men 
in a community frequently cannot be induced to 
serve their country owing to these abuses. We talk 
glibly about throwing public life wide open to all 



POLITICAL PARTIES AND CLASSES 49 

classes by eliminating the trifling deposit now 
required under the law. We are straining at a 
gnat and swallowing a camel! This is another 
direction in which the public conscience could 
correct abuses more effectively than could be done 
by legislative enactment. 



CHAPTER FOUR 

BUSINESS GOVERNMENT 
1. 

THERE was never a period in the history of the 
world more fruitful of new notions in govern- 
ment than the present. There is scarcely a public 
meeting held anywhere nowadays, that does not 
give birth to a new idea. The superstition seems to 
have taken hold of people, that the only reconstruc- 
tion that society needs is what can be provided by 
Act of Parliament. Church Assemblies, socialist 
meetings, Canadian Club luncheons, etc., each 
makes its contribution to the appalling unrest that 
is now manifest. While there are certain things 
Parliament can advantageously do to provide 
necessary machinery and organization to promote 
reform, the main burden must necessarily fall on 
the shoulders of the individual citizen, who must 
wake up to a realization of his duties and respon- 
sibilities to his fellow-man and to the conscientious 
use of the ballot. 

What is required in Canada today is not a set of 
new-fangled political, social or economic systems, 
but rather a complete overhauling and critical 
examination of the present structure, a plentiful 
use of the searchlight and a plentiful application 
of common sense, tempered with common human- 
ity. Cold-blooded business and warm-blooded 

(50) 



BUSINESS GOVERNMENT 51 

sympathy must go hand in hand and prune and 
plant on the way. We must elect and support 
statesmen of high personal integrity and purpose, 
but, above all, with vision and imagination. The 
old school of politician is as dead as Caesar's wife. 
May we never see his shadow again. The call has 
gone out for Business Government. 

Canada is the most plentifully governed country 
in the wide world. It is a veritable Mecca of 
Statesmen. Even Lichtenstein and Monaco fade 
into utter insignificance beside Canada's dizzy 
record in responsible government. I hasten to 
explain, that the burden of responsibility is deftly 
distributed over so many broad shoulders, that, in 
Canada, the role of Atlas is an obsolete occupation! 
As a school in statesmanship, Canada can be highly 
recommended. With our ever-expanding, and 
ever-changing Governments, there is room for all, 
sooner or later. The wayside bristles with honour- 
ables and ex-honourables, of all types, all kinds 
and all conditions. Very frequently, prior to 
retirement, forced or voluntary, they are rewarded 
by a grateful King. Then, for ever after, they 
stand apart from the common herd, in dazzling, 
splendid isolation. The dark and devious paths of 
practical politics sometimes, to be sure, soil the 
shining armour of our political Knight. But "he 
whom the King doth honour, etc." I draw the 
curtain. 

Now, pay attention! We have a noble army of 
twenty-one members of the Dominion Cabinet and 
two or three Parliamentary Under-Secretaries 



52 WAKE UP, CANADA! 

thrown in for good measure. The Province of 
Ontario has nine cabinet ministers. Quebec tops 
the list with ten. Nova Scotia, Alberta and British 
Columbia have eight each, New Brunswick and 
Saskatchewan nine, Manitoba a modest seven. To 
cap the climax, that tiny little Province to the far 
east, Prince Edward Island, comes to the front 
with a solid nine ministers. This makes a total of 
ninety-eight full-fledged cabinet ministers in 
Canada. Needless to add, forty-five of them are 
ornaments of the legal profession. Quebec sports 
eight lawyers out of ten ministers. The Federal 
Government twelve out of twenty-one. The 
lawyers have it! 

All this, I am aware, reads very much like a 
fairy-tale. Ninety-eight ministers to govern eight 
million people! In England a cabinet about the 
same size as our Dominion Privy Council takes 
care of a population of thirty-six millions and of an 
Empire containing hundreds of millions of people 
of all colours and creeds. In the United States a 
cabinet about half the size of our Federal Govern- 
ment looks after a population of over a hundred 
millions. I wonder if any other part of the civil- 
ized world can show a state of affairs to equal 
Canada's wanton extravagance and inefficiency in 
Government? It is a reproach to our business 
sense. 

But the worst feature of it all is, that every one 
of these Cabinets and Parliaments, and "near" 
Cabinets and Parliaments, must put on the usual 
"swank." Great piles of magnificent buildings 



BUSINESS GOVERNMENT 53 

grace the various provincial capitals. Millions 
upon millions have been added to the provincial 
public debt in order that one province might out- 
shine another and provide flashy surroundings for 
our army of ministers and our 884 legislators. The 
Province of Manitoba is now completing its Par- 
liament buildings at a cost of over seven million 
dollars, while the farmers, in many districts of that 
province, wade through mud to get their produce 
to market! And each province has its own petty 
Court — imitation royalty — also set in a suitable 
and expensive frame. The Lieutenant-Governor, 
of course, has, normally, nothing to do but sign his 
name, a function which the Chief Justice of each 
Province could most efficiently and economically 
perform, thus saving the country much absolutely 
useless expense. 

2. 

I entertain the hope, that some day a capable 
writer will give to the world the administrative 
history of the North-West Territories of the old 
days, then comprising the Districts of Assiniboia, 
Saskatchewan and Alberta. That administration 
might well serve as a model of economical and 
efficient government to be studied by all who 
aspire to cabinet rank in Canada. The Territorial 
"Parliament" and administrative buildings could 
perhaps easily have been replaced for $50,000. 
They served all useful purposes, however, and 
housed a large and very busy staff. Sir Frederick 
Haultain, now Chief Justice of Saskatchewan, was 



54 WAKE UP, CANADA! 

Premier and his solitary colleague was Hon. James 
Ross, now a member of the Senate. Each looked 
after three portfolios. It was a "coalition" Gov- 
ernment. Each department was presided over by 
a permanent deputy head, who had an absolutely 
free hand in regard to staff appointments and dis- 
missals, and was held strictly responsible for 
results. The Hon. James Calder, now Federal 
Minister of Immigration, was deputy of the Edu- 
cational Department. Col. J. S. Dennis, Assistant 
to the President, C.P.R., was in charge of Public 
Works; J. A. Reid, until recently Alberta's cap- 
able Agent General in Great Britain, looked after 
the Treasury and two other minor departments, 
and the writer was deputy head of the Agriculture 
Department. This was an out and out "business" 
administration. One never observed the slightest 
indication of "playing politics." The two new 
Provinces created from these territories were 
started practically without a dollar of public debt, 
on autonomy being granted. Look at their finan- 
cial position today! 

3. 

When Canada, or, at least, those parts of Canada 
that formed the nucleus of the present Federation, 
received from the Imperial Parliament responsible 
self-government, it was modelled upon the con- 
stitution, written and unwritten, of Great Britain. 
When the Federation of Canada was finally accom- 
plished and a far-flung empire created, reaching 
from the Atlantic to the Pacific, this constitution 



BUSINESS GOVERNMENT 55 

was automatically extended. It apparently never 
occurred to anyone to examine it critically, with a 
view to ascertaining whether it was as suitable for 
Canada as it had proved to be for Great Britain. 
It is to be noted, that when the United States 
seceded from Britain and drafted its own constitu- 
tion, it did not adopt holus-bolus the form of gov- 
ernment which then existed in Great Britain. Per- 
haps Uncle Sam was wise in his generation. 

When a new President is elected in the United 
States he invites to his Cabinet the most outstand- 
ing personalities in the country. Each is selected 
with a view to his special fitness for the depart- 
ment he is to administer. While the President may 
not always exercise exceptional judgment, and 
while party considerations may, and frequently do, 
dictate nominations, yet there cannot be the least 
doubt, that on the whole, the cabinet material of 
that country is generally of the very highest order. 
The President has the whole country to select from. 

In Canada, on the contrary, the system works 
quite differently. Let us suppose that a General 
Election returns the opposition party to power, 
with a workable majority. The leader is there- 
upon requested by the King's representative to 
form a government. The first obstacle to intelli- 
gent selection that meets the new Prime Minister, 
who is, of course, practically restricted, in his 
selection, to the elected members of Parliament, is 
territorial claims. The unwritten law is, that each 
Province must have so many cabinet representa- 
tives. Next comes the fact, that a certain number 



56 WAKE UP, CANADA! 

of these cabinet representatives must, if possible, be 
French-speaking. Then come religious consid- 
erations. An undue preponderance of Methodists, 
Presbyterians or Roman Catholics could not, for a 
moment, be countenanced. 

We are apt to witness the spectacle, that from 
some province entitled to perhaps one cabinet 
representative, the Government has a total elected 
following of possibly three members. One of these 
may be a Roman Catholic or may belong to some 
other denomination already too largely represented 
in the Cabinet. He must, therefore, be discarded. 
The choice is then narrowed to the two remaining 
members. One of them is perhaps absolutely im- 
possible from every point of view or there may be 
doubt as to his chances of re-election. The new 
Prime Minister is finally face to face with no 
choice whatever. There only remains one man 
whom it is possible to include in his Cabinet. On 
the other hand, there may be most excellent cabinet 
material in the new House from other provinces, 
which cannot be used for territorial or other 
reasons. 

This statement is by no means overdrawn. There 
is scarcely ever a government formed, that does not 
include several members who find themselves 
within the charmed circle purely by force of cir- 
cumstances. Men, who, in private life, probably 
would not be entrusted with the responsibility of 
managing the smallest kind of business, are pitch- 
forked into the administration of important public 
departments. Every possible consideration, except 






BUSINESS GOVERNMENT 57 

that of efficiency, governs in the construction of a 
Dominion cabinet. In the provinces the same con- 
ditions generally apply in perhaps a more modified 
form. The result is, that Canadian statesmen fre- 
quently serve no apprenticeship whatever. They 
walk from the shop or office straight into His 
Majesty's Privy Council or into Provincial Cab- 
inets. This system is a rank violation of the first 
principles of effective business organization, which 
seldom promotes by leaps and bounds. Few men 
possess sufficient balance to be proof against the 
destructive influence of spectacular promotion. It 
ruins many a good man. In the United States, as 
we have seen, none but outstanding men of national 
reputation can hope to be invited into the cabinet. 
In Great Britain, the ambitious man first seeks 
service as private secretary to some Under-Secre- 
tary, afterwards to a cabinet minister. Then he 
may hope to get a Parliamentary Under-Secretary- 
ship and, after making good in such a post, may 
finally enter the cabinet, with full rank. 

The excuse that this weird system of ours is in- 
herited from Great Britain is no argument at all. 
As is well known, territorial claims receive no 
consideration whatever in the selection of British 
cabinet ministers. The reason for this, of course, 
may partly be found in the fact that Great Britain 
is a much more compact country than Canada. One 
would, however, expect territorial ambitions to 
make themselves felt in Scotland, Ireland and 
Wales. However, this is not so. The people there 
have evidently found that thev can rise above such 



58 WAKE UP, CANADA! 

considerations. If Canada is ever to enjoy efficient 
•'business" Government, it is quite evident, that 
local jealousies must be eliminated so as to leave to 
the Prime Minister, at least, the meagre privilege 
of selecting from amongst his entire following in 
Parliament the best talent that may be available, 
irrespective of creed, race or territorial considera- 
tions. Even with this privilege conceded, he will 
find himself greatly hampered. This is something 
for the free and independent voter to think about. 

4. 

Let us suppose, that the honourable and distin- 
guished member from Podunk Centre, who has 
just been invited to join the Government, in due 
course reaches the nation's capital, or the capital of 
his province, as the case may be, and is, with much 
pomp and many ceremonies, sworn in as a member 
of His Majesty's Privy Council or the Council of 
the Province. He is introduced to the leading 
officers of his department and takes possession of 
the Minister's office. Then follows a series of 
banquets, tendered by admiring fellow citizens. 
His life is publicly reviewed from childhood to 
adolescence. Interesting incidents, foreshadowing 
the great career yet to come, are dug up by ex- 
schoolmates. He is, in short, wined, dined, ful- 
somely praised and loudly heralded as Podunk 
Centre's great son. By the time he returns to his 
department, he is fired with laudable ambitions. 
He also, unless he is mentally very well-balanced, 
is rapidly developing a "swelled" head. He is 



BUSINESS GOVERNMENT 59 

going to "run" his department. He is going to be 
no figure-head. 

There is, and has been, in present and past gov- 
ernments of Canada, a preponderance of wide- 
gauge, able men of affairs, and in many instances, 
men of very great capacity indeed. But the medi- 
ocre element is also represented. Our friend from 
Podunk Centre belongs, of course, to the latter 
type. We will follow his meteoric course a little 
further. Statistics show that his previous adminis- 
trative experience has generally been gained in a 
law office and has probably been confined to paying 
his office rent, and hiring and firing a few clerks. 
Yet this heaven-born administrator is going to 
"run" a great public department. 

His deputy and many of the leading officers were 
probably appointed by a previous government of 
the opposite political stripe. Therefore, these men 
cannot, of course, be trusted. They will get him 
"in wrong" with the public and "our friends." He 
finds himself overwhelmed with unfamiliar detail. 
He most probably has no executive ability what- 
ever. Public business is held up. Constructive 
effort is absent. He finally succeeds in fairly dis- 
organizing a complicated machine and then reluct- 
antly capitulates and, after a while, if he has an 
average amount of common sense, he begins to see 
the wisdom of refraining from meddling. It may 
then dawn upon him, that he is a "policy" man and 
not an executive. His education has begun. 

Broadly speaking, the curse of public adminis- 
tration in Canada is precisely the failure of minis- 



60 WAKE UP, CANADA! 

ters to understand where their responsibilities 
begin and end. This is particularly true in Provin- 
cial administration. We are overwhelmed with 
amateur administrators and egregious blunderers. 
If we were less "plentifully" governed, our cabinet 
ministers would probably find it necessary to 
devote their exclusive attention to "government" 
instead of detailed administration, which is not, or 
should not be, their proper function. Councils 
would also give careful consideration to great ques- 
tions of public policy instead of wasting time over 
the repair of the parish pump. What we lack in 
Canadian governments is constructive policy and 
driving power from within. We shall never get 
it under present conditions. Our executive and 
administrative machinery must be made to func- 
tion more efficiently, and with less periodic dis- 
turbance. 

But it is perhaps unfair to expect too much, from 
our Federal Ministers, at any rate. Just think of 
the salaries we pay! The Prime Minister of 
Canada receives the pay of the manager of a fairly 
important branch bank in Canada. He has to run 
an expensive election every four years or so and is 
also called upon to entertain and live up to his 
great position. Could anything be more ridiculous 
and parsimonious? Most of the members of the 
Federal Cabinet make heavy sacrifices in accepting 
portfolios, although some of them, of course, are 
very much overpaid. As a rule, the Provinces are 
more liberal paymasters and the class of men 
largely found in Provincial Governments probably 



BUSINESS GOVERNMENT 61 

never made more money in their lives before. We 
should revise our whole scheme of Federal admin- 
istration, starting with the salaries of Ministers. 

5. 

Our Civil Services, provincial and federal, are 
on an entirely wrong basis. An effort has been 
made by the Dominion authorities to abolish pat- 
ronage by creating a Civil Service Commission. In 
most of the Provinces the "spoils" system is frankly 
in vogue. It is doubtful whether appointments by 
a commission will result in personnel much super- 
ior to the old patronage system, i.e., nomination by 
members of Parliament. 

How would a great business concern handle this 
question? The head would appoint his principal 
executives, the executives their staffs, and so on all 
the way down. A chain of responsibility would 
thus be established from the bottom up. Our great 
railway organizations, with many times the number 
of employees our Governments have, are built on 
this plan. The president of the company appoints 
his general manager. The latter selects his super- 
intendents, who in turn exercise control over the 
roadmasters, who appoint the section foremen, who 
hire and fire the maintenance-of-way men under 
them. It is a system of rigid responsibility of 
bosses, for the work and actions of their sub- 
ordinates. 

Is there any reason why a deputy head of a 
public department, selected by the responsible 
minister, should not be responsible for the appoint- 



62 WAKE UP, CANADA! 

ment of his chief lieutenants and each of these in 
turn appoint or nominate the subordinates in his 
own branch or bureau? We could then hold our 
men responsible for results, which we cannot do 
now. This would be sound organization. 

There also seems to be a superstition abroad, and 
I feel bound to say, that it is not confined to 
Canada, that once a person enters the public service 
of his country he is provided for during life. His 
appointment is formally made by order-in-council 
and is virtually permanent, subject to good behav- 
iour. In the bad old days, it frequently lasted only 
until another political party took the helm. This 
condition, founded on absolutely mischievous rea- 
soning, is largely responsible for our notorious fail- 
ure to attain maximum efficiency and economy in 
our public business. I see no reason why an 
appointment to the public service of Canada should 
rest on a more permanent basis than one to the 
service of a railway company or other large busi- 
ness concern. It is precisely this security of tenure 
idea that destroys the morale of our Civil Service. 
That fact was clearly established in connection 
with the recent searching investigation of the Fed- 
eral Printing Bureau. A commercial printing 
office employs such hands as are needed from day 
to day. The Printing Bureau, on the other hand, 
proceeded on the assumption that a public em- 
ployee held his job for life, with the inevitable 
result. He should, of course, hold his employ- 
ment on two grounds only, first, that his particular 
job is useful, and, secondly, that he is "making 



BUSINESS GOVERNMENT 63 

good." That is the unwritten law in business life 
and should also be the accepted standard in public 
employment. 

Deductions for superannuation should be dis- 
continued. This system merely creates a vested 
interest on the part of the contributing civil serv- 
ant. The country should follow the plan of the 
Canadian Pacific Railway and make independent 
provision for aged employees. This would give 
the Government a much freer hand in dispensing 
at any time with inferior servants. 

The present Civil Service Commission has done 
excellent work and could, under the system sug- 
gested, render still more valuable services. It 
should remain the clearing house and receive all 
applications for employment, including those sub- 
mitted through members of Parliament. It should 
occupy the front trenches against any attack by 
patronage hunters and would be a Government 
employment bureau to which the various respon- 
sible officials would apply for such help as was 
needed. But the appointment would be made by 
the responsible officer and not by the Commission. 
It could also deal with cases of complaint of 
wrongful dismissal. It could assist in improving 
the service in a hundred ways, especially with 
respect to economy and efficiency. It should have 
complete power of investigation into office organ- 
ization in any department of the service and should 
have on its staff efficiency experts in various lines. 
It should interest itself in promoting standard 
office routine and practice throughout the entire 
service. 



64 WAKE UP, CANADA! 

I shall, of course, at once be told, that all this 
would mean a return to the "spoils" system, from 
which Heaven preserve us. I claim, on the other 
hand, that if we cannot introduce common, honest 
business methods into such a comparatively simple 
task as administering the ordinary services of Gov- 
ernment, what is the use of even talking about 
throwing further administrative burdens on the 
State? The whole proposal of State socialism and 
all it involves falls to the ground absolutely and 
ignominiously. The bold assertion apparently is, 
that any deputy-head who offended members of 
Parliament by refusing to employ their incom- 
petent proteges, would lose his job. Personally, I 
believe we have progressed beyond that point. 
The right sort of deputy-head would not lose his 
job. 

6. 

During the period of the War, the Federal Gov- 
ernment deemed it necessary to create various 
boards and commissions to administer certain new 
and special war services. It became fashionable 
amongst a certain class of newspapers and public 
speakers to cast ridicule on this new development 
in administration. The phrase "government by 
commission" was coined and worked to death. One 
often wonders whether these self-appointed critics 
ever gave a moment's serious thought to the matter. 
Most probably, it was only a manifestation of the 
deep-seated disease preying upon the electorate of 
our country — the habit of condemning everything 



BUSINESS GOVERNMENT 65 

and anything a political party, with which one is 
not in sympathy, does or says. Is such a state of 
mind really universal or is it just plain lunacy? 

It is, of course, not the function of the elected 
representatives of the people to manage the peo- 
ple's business. Their duty is to consider the policy 
to be followed by the responsible ministry, which 
appoints properly qualified officers, for whose 
administration it becomes responsible. This is the 
only sound principle on which public business can 
be conducted. When the war came, the Govern- 
ment wisely recognized the impossibility of pro- 
perly performing, directly, the many new functions 
forced upon it by exigencies of war, and, therefore, 
resorted to the commission expedient. The experi- 
ment proved satisfactory. Some of these war 
institutions, notably the War Purchasing Commis- 
sion, did such successful work and effected such 
striking economies, that they are now to be merged 
in the permanent establishment at Ottawa in their 
present, or a slightly modified, form. 

As a general proposition, and having in view 
efficiency, the various Governments throughout 
Canada might well study the success of these Fed- 
eral administrative war commissions. It is borne 
in upon one's mind with irresistible force, that 
Government departments might with advantage 
confine their efforts, largely, to the collection of 
revenue, general investigation, and purely admin- 
istrative work. The great spending departments of 
the Government, such as the Post Office and Public 
Works Departments, should be administered by a 



66 WAKE UP, CANADA! 

small executive board or commission, including the 
chief officers of each department, possibly presided 
over by the responsible Minister. This principle 
has now been recognized as sound by the amal- 
gamation of Government railways under the man- 
agement of a board of directors nominated by the 
Government. 

Can any argument be advanced against the 
elimination of partisan politics from the Post 
Office management, for instance? Will anyone 
deny, that ten per cent, of the post offices and mail 
routes in Canada are absolutely unnecessary, that 
the Minister is importuned by local members for 
new T offices and other favours day in and day out, 
that, in fact, under capable management, the really 
beneficial services of the department could be 
vastly improved and the annual deficit be trans- 
formed into a surplus? 

A new minister comes in. He is imbued with 
progressive ideas. His administration shall be a 
red letter period in Canada's postal administration. 
"Penny postage" is the thing. The letter rate is 
reduced and followed by further post-office deficits. 
But this minister is heralded as a public benefactor. 
Of course, it is all for personal glorification and 
political effect. And the joke of it is, that the man 
on the street fails to be impressed. The man on the 
farm laughs at it all. How many letters does he 
write in a year? Does not the entire benefit of the 
reform almost exclusively affect the big mail-order 
establishments, financial institutions, and other 
interests that largely use the mail services of the 



BUSINESS GOVERNMENT 67 

country? Would a business board endorse any 
such foolish, revenue-destroying proposal as that? 

It will doubtless be argued, that the Post Office 
services should not be administered with a view to 
earning surpluses. On the other hand, it can 
scarcely be held that deficits should be tolerated. 
But there seems no adequate reason why such con- 
venient and inexpensive machinery could not pro- 
fitably be utilized to raise at least a moderate 
amount of surplus revenue, particularly in view of 
our present financial situation. If a farmer who 
buys a spade is to be compelled to contribute 
towards the revenues of the country by means of 
consumption taxation, it seems unreasonable, that a 
mail-order house or a bank should be given the 
privilege of using the mails at cost, or even below 
cost. We might as well be consistent and revise 
all these obsolete, finespun theories. Canada needs 
the money. 

And public works? Is it necessary to argue fur- 
ther? Canada's political history is full of the most 
flagrant abuses and corruption in connection with 
our Federal and Provincial Public Works Depart- 
ments. It is high time that the proverbial "pork 
barrel" was relegated to the background, and our 
enormous annual national and provincial expendi- 
tures in this respect placed under proper business 
supervision and divorced entirely from party poli- 
tical management. One could write volumes on 
the subject, but the case is too convincing and 
instances too well known to necessitate further 
comment. 



68 WAKE UP, CANADA! 

7. 

Canada's imitation House of Lords, our national 
"Divorce Mill," is perhaps the most pathetically 
inefficient and impotent branch of our representa- 
tive system. While the House of Lords at West- 
minster has been described as the most brilliant 
aggregation of legislators in the world, and, while 
the Senate of the United States has arrogated to 
itself the supreme position in the administration of 
that country, Canada's Senate has generally been 
ineffective and mediocre. When, in the political 
history of the country, it has been called upon to 
be gloriously patriotic, it has only been partisan. 
Whatever the Upper Chamber was intended to do 
has surely never been done, as one can credit 
scarcely a single great action to this fifth wheel of 
our legislative machinery. It is supposed to serve 
as a check on ill-considered, ill-digested legislation. 
It does not fulfil that function. If it did, its life 
would probably be short, because the country 
would not tamely submit to gravely electing its 
popular representatives merely to have their acts 
nullified by a wholly irresponsible body. 

The British North America Act 1867 provided 
for the appointment of 24 senators each for Quebec 
and Ontario and the same number for the Mari- 
time Provinces. Why 24 and not 48, or any other 
arbitrary number has never been explained. Other 
portions of Canada have necessarily had to be 
dealt with, by way of amendment to the Act, from 
time to time. This is another bright and shining 



BUSINESS GOVERNMENT 69 

example of the delightfully promiscuous methods 
of our Fathers of Confederation. There was evi- 
dently no definite purpose or plan to be served in 
making provisions for Canada's Upper Chamber. 
In the United States, there are two senators repre- 
senting each political unit. Nevada, with less than 
a hundred thousand people, has precisely the same 
senate representation as New York with over nine 
millions. The senate there is evidently designed to 
protect the interests of the smaller States and less 
densely populated sections of the Union. This is 
a definite and clear-cut mission. 

It is not difficult to trace the causes of the gen- 
erally unsatisfactory status of Canada's Senate. 
The vicious practice of making the Senate a con- 
venient vehicle for bestowing rewards upon useful 
and importunate party-hacks, and making it the 
dumping-ground for mediocre politicians rejected 
at the polls, has something to do with it. This 
flagrant prostitution of a legislative body that 
surely must have been intended to fulfil important 
duties, functioning in an atmosphere removed from 
partisan and other sordid influences, has evidently 
brought in its train the inevitable result — public 
contempt and dry-rot. Such a body obviously can- 
not rise above its personnel, and the responsibility 
for this lies with past and present Governments. 

That the Senate should be frankly partisan in its 
attitude towards legislation submitted to it, now 
seems to be accepted as a matter of course. Yet, a 
moment's reflection should make it clear, that this 
is precisely what the senate should never be, under 



70 WAKE UP, CANADA! 

any circumstances whatever. The mere suspicion 
of partisanship destroys the last shred of its useful- 
ness and justification in the public estimation. A 
partisan senator should be placed in the same cate- 
gory as a partisan judge — an object of scorn and 
contempt. 

A popular grievance against the Senate is its 
tender solicitude for the welfare of the "interests." 
Perhaps this is partly accounted for by the fact, 
that out of its complement of 93 members, there are 
23 lawyers, and 60 representatives of other profes- 
sions, commerce and industry. The interests of 
agriculture are championed by 9 farmers and 
labour has one whole undivided representative all 
to herself! I might in all fairness add, that there 
has been a noticeable improvement in the person- 
nel of the more recently appointed senators, and 
that there now seems to be a disposition to provide 
for more adequate representation of agriculture 
and labour in the Upper House. 

If we are to maintain an expensive institution 
like the Senate, arrangements ought certainly to be 
made to give it useful work to do and to put a 
check on the appointments. As a first step, in con- 
nection with all nominations to the Senate, provi- 
sion might very well be made compelling the gov- 
ernment of the day, to submit to Parliament the 
name of the proposed appointee, with a complete 
record of the public services he has performed, and 
a statement of the special qualifications that caused 
the Government to recommend him as a useful 
addition to the Upper House. Provision should 



BUSINESS GOVERNMENT 71 

also be made for the retirement of Senators upon 
reaching an advanced age. Compulsory attendance 
at all sessions of the Senate, or evidence of physical 
inability to attend, should likewise be insisted 
upon, and absence for a certain length of time 
should automatically render the seat vacant. These 
reforms would be better than the present intoler- 
able situation. 



CHAPTER FIVE 

PUBLIC ADMINISTRATION OF COMMERCE AND 
INDUSTRY 

1. 

IT cannot be denied, that as an educational 
factor, political and social, the Great War 
occupies the centre of the stage. During the past 
four years we have been taught many illuminating 
lessons, the most striking of all being perhaps the 
facility with which the State stepped in, all over 
the world, and calmly took possession of mines, 
great industries, steamships and railways. It 
organized huge trading concerns, wrote insurance 
by the billion, in fact, did precisely all the things 
that our reactionaries have sedulously been telling 
us could never be done by the State. Vested inter- 
ests were swept to one side over-night, and State 
control came into being, and the evidence now 
available seems to be, that the latter, on the whole, 
proved very successful. 

All this happened under war conditions, and it is 
not perhaps fair to draw too rigid conclusions from 
the special experiences of war-time. One import- 
ant factor in favour of success was undoubtedly, 
that all petty, partisan criticisms were silenced dur- 
ing the great crisis, thus giving governments a freer 
hand; also that outstanding men, who, under 
ordinary circumstances, could not be secured for 

(72) 



COMMERCE AND INDUSTRY 73 

public employment, were available for responsible 
positions. But the fact remains, that this thing has 
been done, and successfully, and the "man on the 
street" is therefore, not as timid in discussing the 
policy of public ownership and administration, as 
he was once upon a time. The chances are, that a 
sufficient number of people may even be induced 
to vote for it one of these days, when the "powers 
that be" will be confronted with the problem as a 
practical proposition. 

In the earlier forms of civilization the only 
public responsibility undertaken was to organize 
the nation to repel attacks from the outside and 
thus enable the people to pursue their callings 
in peace. As civilization progressed and became 
more complicated, the State found it necessary 
to interest itself more closely in the life of the 
individual citizen in many ways. To-day the State 
performs an enormous amount of what is properly 
called welfare work. Health, sanitation, educa- 
tion, the protection of life and property, etc., are 
all regarded as legitimate state enterprises. The 
individualistic attitude is vanishing. The "new 
spirit" is abroad, and it is difficult to forecast what 
new activities in the way of public enterprise the 
not distant future may have in store for us. 

It is usual at socialist and Bolshevist meet- 
ings in Canada to denounce the "interests" and to 
demand Government ownership and operation of 
this, that and the other utility and industry. The 
issue is distinctly before the country and the 
disciples of Karl Marx will see to it, that it remains 



74 WAKE UP, CANADA! 

there. Under the circumstances, it is in order to 
examine the proposal judicially and fairly. It is, 
judging by past standards, an extraordinary and 
unusual proposition, but we must train our minds 
to get used to these unusual proposals. They are 
here to stay. 

We hear a great deal of criticism in connection 
with the organization of "big business," and not 
entirely without good reason. Big business, how- 
ever, is not necessarily bad business or corrupt 
business. In the amalgamation of industrial con- 
cerns, banks, railways, etc., vast economies are 
generally effected, which, under public-spirited 
management, would benefit the consumer in the 
way of lower prices. The actual effect has, how- 
ever, generally been exactly the reverse. With the 
elimination of competition, prices have often, not 
always, been increased. These mergers have also 
been made the excuse for the inflation of capital for 
which the consumer is asked to provide dividends. 
This perhaps is the most objectionable feature of 
such transactions and is dealt with elsewhere. In 
the United States the Sherman Act has put a stop 
to such operations. Those who believe in public 
ownership may, however, derive some comfort 
from the fact, that the creation of mergers is a very 
valuable contribution towards the cause they 
espouse. The merger has been well characterized 
as the "halfway house to public ownership." Ob- 
viously the State or the municipality can much 
more readily take over a well organized monopol- 
istic industry than a vast number of smaller con- 



COMMERCE AND INDUSTRY 75 

cerns acting independently. Therefore, let the 
good work proceed — but control the merger, as far 
as possible. 

It is universally conceded that the principle of 
co-operation is sound. Co-operative business has 
made enormous strides in many European coun- 
tries and in some of the overseas colonies. We 
have outstanding examples of successful cohesive 
effort in organized business in Canada. The Grain 
Growers movement in the West is a case in point. 
We must also take into consideration the indisput- 
able fact, that the first step in civilization was the 
co-ordination of energy and the banding together 
of human beings for co-operative effort in mutual 
aid. Every advance in social and individual 
growth may be traced to cohesive organization. 
Public administration of business and industry is 
merely a step in the evolution of the co-operative 
principle. In fact, it is its logical goal. 

On looking back a few decades, one is impressed 
with the fact, that the tendency in Canada has been 
distinctly toward public ownership of utilities. 
Urban centres which had granted franchises for 
water supply, lighting, surface transportation, etc., 
have gradually, on the expiration of these mono- 
polies, gathered them into their own municipal 
organizations and, on the whole, efficiency and 
economy have been fairly well observed in the 
administration of such utilities. The cases of glar- 
ing failure have probably not been much more 
numerous than they would have been under private 
or corporate ownership. In other words, the 



76 WAKE UP, CANADA! 

experiment has been reasonably encouraging up to 
date. If, here and there, money has been lost on 
operation, the chances are that the citizens have 
benefited in better service than they would have 
received under private control. 

The following are the four main questions to be 
examined in regard to the feasibility of a general 
policy of public administration of commerce and 
industry: 

(1) Are we far enough advanced socially and 
educationally to eliminate the element of competi- 
tion from our industrial and commercial system? 

(2) Can the Government operate as economic- 
ally and efficiently as private enterprise? 

(3) Will the public prove to be a better and 
more generous employer than private enterprise? 

(4) What would be the political effect of wide- 
spread public administration? 

There are very grave reasons for approaching 
the subject with great caution and a realization 
that much new ground may have to be broken 
before Canada can safely tread the paths of ad- 
vanced socialism. The subject of the nationaliza- 
tion of industry is so vast and complicated, that no 
more than a very superficial examination of the 
matter can be attempted here. 

2. 

The most outstanding effect of public adminis- 
tration would be the elimination of competition 
and of private gain. The term "public adminis- 
tration" would, of course, include Federal, Provin- 



COMMERCE AND INDUSTRY 17 

cial, and Municipal management of business. At 
first sight, and to our very limited vision, the pro- 
posal is staggering, but on closer study it will be 
found to be in line with human progress generally. 
It is dangerous to set up private industry as a thing 
sacred and inviolate. We should realize that 
industry carried out on the present enormous scale, 
and under the factory system, is of comparatively 
modern origin. Our old people will remember a 
very different organization of industry. It might, 
therefore, with perfect propriety be held, that the 
factory system, coupled with private or corporate 
ownership, is just on trial and is as yet in the experi- 
mental stage. Considerations of public interest 
will ultimately govern the policy to be followed. 

Our competitive system unquestionably rests 
upon a reasonably sound foundation. There are 
many objections to it, but much to be said for it. 
The wisdom of its abolition as a feature of our com- 
plicated industrial and commercial life cannot be 
determined purely from a point of view of eco- 
nomy. It is a social question primarily. A nation 
cannot advance faster than its individual citizens. 
I cannot do better than to quote Smiles on the 
general subject of competition. This is what he 
says: 

. . . . Some allege that this want of sympathy 
arises, for the most part, from the evils of competition. It 
is "heartless," "selfish," "mischievous," "ruinous" and so 
on. It is said to produce misery and poverty to the mil- 
lion. It is charged with lowering prices, or, almost in the 
same breath, with raising them. Competition has a broad 
back and can bear any amount of burdens. 

And yet there is something to be said for competition, 



78 WAKE UP, CANADA! 

as well as against it. It is a struggle — that must be ad- 
mitted. All life is a struggle. Among workmen, com- 
petition is a struggle to advance toward higher wages- 
Among masters, to make the highest profits. Among 
writers, preachers and politicians, it is a struggle to suc- 
ceed — to gain glory, reputation or income. Like every- 
thing human, it has a mixture of evil in it. If one man 
prospers more than others, or if some classes of men 
prosper more than others, they leave other classes of men 
behind them. Not that they leave those others worse, but 
that they themselves advance. 

Put a stop to competition and you merely check the 
progress of individuals and of classes. You preserve a dead 
uniform level. You stereotype society and its several orders 
and conditions. The motive for emulation is taken away 
and caste, with all its mischiefs, is perpetuated. Stop 
competition, and you stop the struggle of individualism. 
You also stop the advancement of individualism and, 
through that, of society at large. 

Under competition, the lazy man is put under the 
necessity of exerting himself; and if he will not exert 
himself, he must fall behind- If he do not work, 
neither shall he eat. My lazy friend, you must not 
look to me to do my share of the world's work and 
yours too ! You must do your own fair share of work, 
save your own money, and not look to me and to others 
to keep you out of the poorhouse. There is enough for 
all ; but do your own share of work you must. 

Success grows out of struggles to overcome difficulties 
If there were no difficulties, there would be no success. 
If there were nothing to struggle or compete for, there 
would be nothing achieved. It is well, therefore, that 
men should be under the necessity of exerting themselves. 
In this necessity for exertion we find the chief source of 
human advancement — the advancement of individuals as 
of nations. It has led to most of the splendid mechanical 
inventions and improvements of the age. It has stimulated 
the ship-builder, the merchant, the manufacturer, the ma- 
chinist, the tradesman, the skilled workman. In all depart- 
ments of productive industry, it has been the moving 
power. It has developed the resources of this and other 
countries — the resources of the soil, and the character and 



COMMERCE AND INDUSTRY 79 

qualities of the men who dwell upon it. It seems to be 
absolutely necessary for the purpose of stimulating the 
growth and culture of every individual. It is deeply rooted 
in man, leading him ever to seek after, and endeavour to 
realize, something better and higher than he has yet at- 
tained. ... 

I could wish that every impatient reformer 
would learn this by heart and ask himself honestly 
whether our social state is sufficiently far advanced 
to eliminate the impulse of competition from our 
daily lives and efforts. Much water will run 
under the bridges before the sense of duty to the 
public is sufficiently strongly developed, even in 
the majority of men, to justify our country in em- 
barking upon any wide policy that would ignore 
the driving power of competition. 

Our labour organizations today are, in a meas- 
ure, endeavouring to minimize the effect of the 
competitive system by means of the standard wage. 
But, on the other hand, no trade union man would 
for a moment subscribe to the principle, that the 
hodcarrier should receive the same pay as the brick- 
layer, or the labourer as the plumber. Such being 
the case, the principle must also be accepted, that 
the foreman must receive higher pay than those 
below him and the competent manager still higher. 
All of which is tantamount to admitting, that 
human beings are cast in various moulds, that the 
value of their services consequently varies enor- 
mously, and that this principle applies even within 
the same occupations. It also becomes clear, that 
no cast-iron rules that eliminate the personal 
equation can be enforced with justice. Some one, 



80 WAKE UP, CANADA! 

in fact, must determine the value of the services of 
each individual and this value, in turn, depends 
largely on the amount of competition there is for 
such services. The consistent socialist evidently 
has obstacles to surmount, and, possibly, sacrifices 
to make, before the world can accept his creed of 
equality! 

The great majority of those who believe in 
public administration of enterprise would confine 
such activities to utilities and perhaps certain 
selected industries and business enterprises that 
would readily lend themselves to consolidation 
under State or municipal management. But there 
are some people who would include every business 
activity. The industrial and business development 
of a nation is promoted by the progressive element 
of its population, those men who will take a chance 
and pilot a venture into safe waters in the face of 
almost insuperable handicaps. The State or muni- 
cipality will take small chances only. In business 
it becomes a case of the "survival of the fittest." 
Many ventures fail — some succeed. The personal 
equation is often the governing factor. 

If every avenue of speculative effort were closed 
and nothing but the "sure thing" had any chance of 
active development, which would be the case under 
consistent public control, we should run a great 
risk of utter national stagnation. Our natural 
resources would remain undeveloped and unem- 
ployment would follow. A new country organ- 
ized on such a basis would utterly fail in its mis- 
sion. Its men and women would presently lose 



COMMERCE AND INDUSTRY 81 

all initiative and would gradually become unfit for 
their duties as citizens of a democracy. Inertia 
would hold sway. The human unit would degen- 
erate. Even the most ardent disciple of Karl 
Marx cannot ignore these very potent facts. Before 
private enterprise, spurred into vigorous and dar- 
ing action by the hope of ultimate success and its 
legitimate reward, can be entirely ignored as a 
factor in our scheme of national life, a new and 
superior race of men and women, with higher 
ideals and aspirations, patiently inculcated through 
generations of high thinking and plain living, must 
take the places of the modern frail and selfish 
human animals. That seems reasonably clear. 



A very important argument in favor of public 
administration lies in the facility with which 
capital can be thereby obtained for all legitimate 
purposes and the low rate of interest at which it 
can be employed. This is, of course, an enormous 
advantage if properly utilized and if other things 
are equal. Private or corporate ownership can- 
not begin to compete in this respect. Another asset 
is the ability of the public to create a monopoly, 
absolute or virtual, and, therefore, to absorb all the 
business available in any particular line. No city, 
operating its own lighting plant, for instance, would 
grant a franchise to a private concern to supply 
current to its citizens. It would wisely preserve its 
monopoly. A certain amount of goodwill which 
has a distinct business value may also be expected 



82 WAKE UP, CANADA! 

in connection with any municipal or state-operated 
concern. The public, enjoying first-class credit, can 
also buy its material for cash and thus effect great 
saving. Having no competition, it can sell for cash 
only, and eliminate bad debts and expensive book- 
keeping. There are many great advantages to be 
urged in favour of public administration of business 
or industry. The greatest obstacle to efficient and 
economical public administration lies undoubtedly 
in the handicaps imposed by our defective social 
organization. This must be improved, indeed re- 
organized, before the best results can be obtained. 
This, again, involves a reconstruction of our whole 
point of view towards public affairs. 

In all successful enterprise, the direction and in- 
spiration come from the top. It centres ultimately 
in one single individual, who has the capacity and 
imagination to organize, direct and inspire his sub- 
ordinates. Such an individual commands a high 
rate of remuneration. He furnishes the brains and 
driving power of all successful undertakings. The 
competition for his services is keen. He possesses, 
perhaps, the most valuable business qualification 
with which any human being can be endowed. He 
is seldom in public employment. The price offered 
is not high enough and the conditions of employ- 
ment are unsatisfactory and generally distasteful. 

Strange as it may appear, one of the main prob- 
lems of public administration is making it pos- 
sible to induce this type of man to accept public 
service. He knows his own value. He is not 
a political log-roller or ward-heeler. He will 



COMMERCE AND INDUSTRY 83 

not put up with the ignorant and vicious criticism 
or interference of the butcher-alderman or the 
backwoods lawyer, who has successfully broken 
into politics, any more than he would stand for 
similar tactics from an over-fed capitalist or 
pompous director under private or corporate em- 
ployment. Neither has he any intention whatever 
of being hounded by or being made the innocent 
victim of, partisan attacks on the administration of 
the day, Federal, Provincial or Municipal, by sen- 
sational newspapers, whose one mission in life is 
to throw discredit on the "ins" to the advantage of 
the "outs," The type of man under discussion 
jealously guards his reputation. It is his stock-in- 
trade. He cannot afford to jeopardize it through 
having his name dragged in the mud in the interest 
of partisan politics. And this is generally the 
ultimate fate of professional men who manage 
public utilities today. 

It is not, of course, sufficient to employ the 
organizing genius in connection with public under- 
takings. We must also ensure that, while this man 
is directly responsible to some elected body, or a 
committee thereof, he is given a sufficiently free 
hand in buying and selling, and hiring and firing. 

Granting that these difficulties and obstacles can 
be removed, and the services of the successful 
administrator obtained, and retained, for the bene- 
fit of the public, there is scarcely any limit to feas- 
ible public administration, but until such can be 
done, through the force of public opinion, which 
apparently must assert itself more than it has in the 



84 WAKE UP, CANADA! 

past, we had better go slowly in Canada in the 
direction of assuming responsibilities of such a 
nature. 

Quite incidentally, the failure of advanced 
socialism to recognize in its scheme of reorganiza- 
tion of industry and business the vital and outstand- 
ing position of the type of man referred to, stamps 
the whole system as unworkable. The clearest 
evidence of the impossibility of successfully elimin- 
ating "brains" from industrial management is fur- 
nished by the Maximalists in Russia. Industrial 
management there was unceremoniously "fired" 
and its place taken by committees of workmen. 
Needless to say, in a very short time these indus- 
tries came to an absolute stand-still. There was 
no money available in the bank to pay the work- 
men's wages. The expenditure of the Supreme 
Council of National Economy, which operates 
Russian industries, rose from 15 million rubles in 
the first half year to 1,674 millions in the last half 
year. Seven nationalized industries produced 
goods that actually had to be sold at one half of 
the cost of production and the statement is freely 
made, that the average loss on production in all 
industries publicly administered is from 30% to 
50%. Of 232 sugar factories 198 have had to close 
down. The transportation system of the country is 
absolutely demoralized. In fact, the whole coun- 
try is, industrially, quite disorganized. The old 
managers are now being brought back, frequently 
at the point of a gun, and commanded to resume 
their former duties and responsibilities, to bring 
order out of chaos. 



COMMERCE AND INDUSTRY 85 

The complete disregard by our modern socialist 
of the supreme importance of skilled management 
in industry is almost pathetic. It is painfully clear 
that socialistic doctrines need revision very badly 
in the light of the experiences of recent years and 
the dictates of common business sense. However 
important capital and labour may fancy them- 
selves to be, the most important element in success- 
ful industry is management. 

Another serious drawback to public ownership 
and operation, even of utilities, is the general lack 
of intelligence and absence of clear thinking on the 
part of the average ratepayer. He finds it hard to 
understand the necessity for scrapping obsolete 
machinery before it is worn out, or for making 
capital expenditure on buildings and equipment to 
cheapen production and service. Municipal 
authorities cannot afford experimentation. They 
are too timid to take the ten per cent, chance of 
failure that private enterprise cheerfully assumes 
in working out an expensive problem that promises 
results. This attitude leads to stagnation in man- 
agement and kills enterprise absolutely. No busi- 
ness can succeed conspicuously under such condi- 
tions. 

The descendant of the founder of a famous 
machine-shop in England, recently showed an 
American efficiency engineer over his establish- 
ment. He pointed with pride to a metal lathe and 
informed this visitor that the machine was made by 
his ancestor and was still in operation and as good 
as new. So it was, but it should have been scrap- 



86 WAKE UP, CANADA! 

ped many years previously. It was not taking off 
sufficient metal and was losing the firm money, 
every hour it was in use. 

Conventional education will not suffice to 
broaden the point of view of the tax or rate-payer. 
Many well-educated men are narrow. The man- 
agers of public enterprise must, first of all, be 
treated fairly by the press and then be given full 
opportunity to state their case directly to the public 
by means of printed reports, in order that the aver- 
age citizen may have the opportunity of informing 
himself on the conduct and policy of the enterprise 
in which he is virtually a stockholder. There is 
not sufficient publicity work of this sort being done 
by our progressive municipalities and, therefore, 
no educated public opinion is being developed on 
this great problem. 



The question of the position of labour under 
public administration is worthy of most serious 
thought on the part of labour organizations. At 
present, ideas on the subject of public ownership 
are very much in the flux. It is fairly safe to 
assume that, if labour decides that its best interest 
does not at present lie in employment by the public, 
the issue will be cheerfully shelved by other classes. 

There are a great many points from which the 
question must be considered. If the public is the 
ideal employer and paymaster, as the advanced 
school of socialism claims, it, of course, follows, 
that the fullest and most impartial justice will be 



COMMERCE AND INDUSTRY 87 

meted out to labour in public employment. Facts, 
however, do not appear to justify this view. 

The Government of Canada, for instance, is 
notoriously the meanest skinflint among employers. 
How the Federal authorities are able to retain the 
services of the multitude of highly skilled and cap- 
able men in the public service, is a mystery to me. 
In considering the lower grades of Federal em- 
ployees, one is at once struck by the meagre wages 
of postmen, messengers, etc. Could anything be 
more wretched? The Provincial Governments are 
little better. In the face of an enormously increas- 
ing cost of living during recent years, salaries and 
wages have been practically stationary. Any slight 
advances or bonuses that have been asked by em- 
ployees have been resisted by every possible means 
and, finally, grudgingly conceded. The present 
condition is decidedly a most discouraging state of 
affairs from the point of view of labour's interests 
under public administration. 

The municipality as an employer is worthy of 
more than passing remark, as, under any scheme of 
public operation, it is evident that the municipality 
must play by far the most prominent part. Public 
utilities are now operated under municipal aus- 
pices all over Canada and we have, therefore, 
actual performance to guide us in our inquiry, 
apart from conclusions based on theory only. 

The first astounding fact that greets the investi- 
gator is, that strikes of municipal employees have 
occurred frequently in various parts of Canada. 
Now, one can scarcely reconcile the right to strike, 



88 WAKE UP, CANADA! 

with public employment, nor is it logical for labour 
so engaged to use the offensive measures apparently 
found necessary in dealing with irresponsible 
private employers. If the public is the ideal em- 
ployer, coercive action cannot be justified. If not, 
labour must evidently revise its views on public 
administration. There seems no other alternative. 
If strikes, particularly the vicious syndicalistic 
strikes which have been so much in evidence of 
recent years in connection with municipal wages 
disputes, are to be included in the scheme of the 
municipalization of industry and business, the 
public will not be easily converted to the views of 
socialist labour on this subject. As a means of 
completely averting industrial warfare, the scheme 
might commend itself to thinking people. But 
trade unionism, as the word is now interpreted, 
apparently can have no justification or place in 
public employment. The present uncompromising 
attitude of labour in favour of the organization of 
municipal employees is quite inconsistent. We 
must get down to basic principles and cannot 
expect rules to work both ways. 

The conclusion forced upon the average intel- 
lect, therefore, seems to be, that organized labour 
is not concerning itself with any constructive policy 
in regard to this question. It encourages loose 
thinking rather than the attitude of facing facts 
and constructing a consistent policy. It is a bare- 
faced attempt at "running with the hare and hunt- 
ing with the hounds." If the public, admittedly, 
is not a just and fair employer, little fault can be 



COMMERCE AND INDUSTRY 89 

found with the private employer for not being 
greater and juster than the whole. There is a poli- 
tical task to be performed here. A system should 
be worked out whereby justice may be done those 
who are employed by the public, and which should 
be a pattern for private employers to emulate and 
live up to. This would appear to be the very first 
step towards greater and better things. Construc- 
tive socialists should try their hands at this job. It 
is worthy of their best efforts. 

5. 

The last, but not least, important phase of public 
administration of business and industry is now to 
be considered, namely, the political effect of any 
widespread adoption of such a policy by the Fed- 
eral or Provincial Government. An army of Gov- 
ernment employees would be distributed through- 
out the country. In fact, the policy carried 
out in its entirety would mean, that a very large 
proportion of the urban adult population of 
Canada would owe its living directly to the Gov- 
ernment. Such a state of affairs would present 
some interesting problems. 

Each disgruntled employee would, of course, 
vote against the Government in a spirit of revenge 
or reprisal. The great majority of public servants 
would probably vote in favour of the Government 
of the day, out of loyalty. In both cases the 
motive behind the vote would be a highly improper 
one for a model democracy and would fail to con- 
vey a fair expression of opinion on the general 



90 WAKE UP, CANADA! 

record of the Government. Such a vastly import- 
ant section of the vote would in nearly all cases 
swing the whole election. It would be government 
by bureaucracy, pure and simple. 

The Government, on the other hand, would 
realize, when face to face with a general election, 
that its own employees would be the determining 
factor in the election. Granting that human nature 
would not materially differ from its present state, 
the natural tendency would be to overload the 
public service with favours and benefits. One can 
almost visualize, on the eve of a general election, 
the efforts of the practical statesman, whose tenure 
of office depends upon a satisfied public service, 
and of the opposition element, striving to attain 
office. Each would go one better than the other, 
in the way of salaries, working hours, and pensions. 
The public servant would indeed be in an enviable 
position. Instead of working for the public, the 
public would work for him! 

There would also be a great danger of creating 
an absolutely irresponsible bureaucracy. After 
all, there is only a very short step between auto- 
cracy, as they had it in Germany, and socialism 
carried out to its logical conclusion according to 
the generally accepted formula. In the socialistic 
State the individual must necessarily surrender cer- 
tain important rights and liberties. He becomes 
the responsibility of the State, which must, in self- 
defence, have something to say about his particular 
position in the general scheme of production. This 
cannot safely be left to the sweet will of the 



COMMERCE AND INDUSTRY 91 

individual, who must work where his services can 
most advantageously be utilized. 

6. 

Human life is short and we are all prone to 
accept the view, that the evils surrounding us are 
there by divine dispensation, and have always 
existed; that the economic laws governing society 
are as old and immutable as civilization itself. This 
is a gross error. The law of supply and demand is 
comparatively modern, and our factory and capi- 
talistic system still more so. We must endeavour 
not to allow new ideas to startle us too much, no 
matter how revolutionary they may at first appear. 

Our Federal Government and many of our 
municipalities have made a good start in taking 
over and operating public utilities. This is ob- 
viously the first step and it behooves those, who see 
in the elimination of competition, and in the public 
administration of industry and commerce, the solu- 
tion of all our social ills, to work honestly and 
faithfully towards the success of existing public 
enterprises, in order to gain converts for the exten- 
sion of the principle. Those who deliberately 
close their eyes to the many serious obstacles in the 
way of the general nationalization of business 
enterprise, and who thus refuse to assist in their 
removal, are the worst enemies of this economic 
creed. The ranting demagogue and ignorant 
dreamer we have always with us. They are gen- 
erally a hindrance to good causes. 

Just another word on this subject. Public ad- 



92 WAKE UP, CANADA! 

ministration necessarily involves the purchase or 
expropriation of private enterprise. Very inter- 
esting views are now being expressed by advanced 
thinkers on this subject. The doctrine of the in- 
violability of property is being severely attacked. 
It is pointed out, that prohibition, involving the 
destruction of millions of dollars of vested interest, 
was carried through without compensation. It is 
being seriously argued that public interest stands 
supreme and that individual property rights must 
yield first place to the former. The Manchester 
school of economic thought is going into the dis- 
card rapidly. The world is moving on to new 
accomplishments. 

The municipal ownership of all utilities is now 
becoming the accepted policy all over Canada. 
Indeed, with the scrutiny of franchises, and the 
safeguards and handicaps under which they are 
granted nowadays, private capital will not be avail- 
able for such enterprises much longer. The inevit- 
able result will be, that as existing franchises 
expire, the public naturally assumes control and 
ownership. This is merely a step in the process of 
evolution, and the stride from the field of public 
utilities to the larger arena of commerce and in- 
dustry will come, I hope, very gradually, as the 
human unit advances, intellectually and morally, 
and demonstrates his ability and fitness to take his 
place worthily as a cog in the complicated machin- 
ery of the socialized State. 



CHAPTER SIX 

OUR TRANSPORTATION PROBLEMS 
1. 

GREAT BRITAIN, in developing the most 
inefficient transportation system on earth, un- 
wittingly rendered services of incalculable value to 
her overseas dominions. They all profited by the 
horrible example — that is, all but Canada. To our 
Canadian statesmen the fact, that a certain policy 
is adopted in Great Britain and the United States, 
at once places it beyond all argument. Of course, 
it is the very acme of perfection. In Great Britain 
the trains run to the minute, the road beds are per- 
fect, the running time cut down to the last second, 
the cars are most comfortable — what more could 
any one ask? To the visitor it is at first glance a 
demonstration of marvellous efficiency all around. 
But when he digs below the comparatively unim- 
portant passenger facilities and gets down to the 
all-important question of freight traffic, he is con- 
fronted with startling revelations. In some cases, 
freight rates in England on privately owned rail- 
ways, are ten times as large as the rates on Govern- 
ment operated lines on the Continent of Europe. 
You can ship frozen meats from New Zealand to a 
British port at one-half the cost of shipping British 
meat to the same port from another county in Eng- 
land. British agriculture has been strangled and 
destroyed under the blighting influence of its rail- 

(93) 



94 WAKE UP, CANADA! 

way system. The canal system of England has 
been almost completely absorbed by the railway 
interests and competition thus eliminated. Parlia- 
ment is impotent. It is said that twenty per cent, 
of the members of the British House of Commons 
are directors of British railways and the majority 
of the members own railway shares or bonds. 
Every effort at reform is stifled at birth. 

Canada, too, might have drawn a lesson from 
this state of affairs and supported the Hon. Joseph 
Howe in his fearless championship of public 
ownership of railways in the early days of Canada's 
history, but the practical politician has always been 
much more popular with us than the statesman, 
who is seldom picturesque and cannot perhaps 
appeal to the voter with the same force as the prac- 
tised stump orator. Consequently, the excursions 
we have made into that field of public ownership 
have been disappointing. 

The earlier history of railway promotion in 
Canada is steeped in barefaced corruption. I am 
not going to rehash the nauseating details. Hap- 
pily, there is every indication, that this blot on our 
public life is in process of being wiped out. From 
now on, the railways of Canada will probably not 
be conspicuous in politics. Undoubtedly, political 
rather than business considerations have in the past 
dictated our railway policies and we have thus suc- 
ceeded in imposing upon this young country stag- 
gering burdens which must remain to impede our 
progress for generations to come. Ordinary intel- 
ligence also seems to have been lacking in some of 
the decisions reached and measures taken. We 



OUR TRANSPORTATION PROBLEMS 95 

have proceeded on our way like a ship without a 
rudder in charge of a drunken pilot! 

2. 

Highways, canals and railways serve the same 
purposes in the State, each in its own way. The 
statesman includes them all in his transportation 
policy. We do not build three separate and dis- 
tinct highways, parallelling each other, between 
two given points. We pool our resources and build 
one high-class road and maintain it in good repair. 
We used to go in for two telephone systems at 
times, but common-sense generally prevailed in the 
end and one absorbed the other, thereby rendering 
more efficient service to its patrons. But we are 
still unable to eliminate the competition idea from 
our minds when we talk about railways. We still 
fondly imagine, that the more railways we have 
competing for business, the better we are off, when 
a moment's reflection should demonstrate to the 
most shallow minded, that the more competing 
railways we have, the worse we are off. 

Canada now has a Railway Commission clothed 
with the most complete and arbitrary powers. No 
railway can advance rates without its formal con- 
sent. If any community deems itself discrimin- 
ated against in rates or service, its case can be 
brought before this body, which will hear the evi- 
dence on both sides and render and enforce a deci- 
sion. This constitutes complete control and elimin- 
ates practically the value of competition altogether. 
Rates all over Canada, passenger and freight, are 
standard. Ten railways or one, they remain the 



96 WAKE UP, CANADA! 

same for all. Our whole and sole interest in rail- 
ways, therefore, reduces itself absolutely to eco- 
nomical and efficient operation, so that rates may 
be reduced to, or kept at, the lowest possible level 
and the cost of living thereby prevented from in- 
creasing. Obviously, the greater the business any 
individual line controls, the more economically the 
traffic can be handled, and the lower the rates 
would necessarily be under our system of control. 
The more competition there is for a certain volume 
of traffic and the more roads share in it, quite 
clearly, the higher the cost per ton per mile and, 
consequently, the higher the rate the public must 
pay, and the higher the cost of living becomes. 
The case is self-evident and admits of no argument. 
This is not to be construed into a special plea for 
Government operation of all our railways. I am 
far from satisfied, that a Government would exhibit 
greater efficiency than private enterprise. The 
time is past for speculating on this question. We 
should never have permitted the railway service of 
Canada to pass into the hands of private corpora- 
tions. Canada's railway system should, in the first 
place, have been planned with a single eye to effi- 
ciency and economy in operation. Instead of 
several parallel lines into our great cities we would 
then have had one standard, double-track, or four- 
track, trunk line, capable of handling the entire 
business available, at the lowest cost. This was the 
greatest service Government ownership could ever 
have rendered Canada. But this splendid oppor- 
tunity was, in the earlier history of the Dominion, 
recklessly dissipated by unscrupulous politicians 



OUR TRANSPORTATION PROBLEMS 



97 



and incapable administrators. Now we must per- 
force lie on the bed we have ourselves made. It is 
too late in the day to wax enthusiastic about Gov- 
ernment ownership. Fortunately, we have now 
secured adequate and efficient control of the trans- 
portation business of the country through a Rail- 
way Commission, which is the only point of 
material importance just now. That of ownership 
is a mere detail. 

3. 

Purely as a matter of interesting speculation, and 
in order to bring home to Canadians the extreme 
danger of the laisser faire attitude in regard to the 
railway policies of the country and general admin- 
istration, it is useful to give a bird's eye view of the 
result of our past policy of subsidizing the con- 
struction of railways by private interest. The 
Drayton-Ackworth report contains the following 
statement showing the cost to the country of Gov- 
ernment lines and also the aid given other systems 
by the Government of Canada : 



— 


Subsidies. 


Proceeds 

of 
lands sold. 


Loans 
outstanding 

or 
investment. 


Guarantees 
outstanding. 


Total. 


Canadian Northern 


$ 

38.874.148 

104,690.801 

13.003.060 

726.320 


$ 

34.379.809 
123.810.124 


$ 
25.858.166 


$ 
199.141.140 


$ 
298.253.263 
228,500,925 


Grand Trunk Railway. . . . 


15.142.633 
70.311.716 




28,145,693 




43.432.848 
13.469.004 


1 14 470 884 


Grand Trunk Pacific 




13,469,004 

159,881,197 

116,234,20' 

9,496,567 








159.881.197 

116.234.204 

9.496.567 


























Total 


157.294,329 


158.189.933 


396.924.483 


256.042.992 


968.451.737 





98 WAKE UP, CANADA! 

Under subsidies to the Canadian Pacific Railway 
has been included the estimated cost of construction 
east of Winnipeg handed over to that company by 
the Government. The report above referred to in 
commenting on this statement goes on to say: — 

". . . . Not counting the loss of interest for 
many years upon the investment in roads operated 
by the Government, it appears that for the eight 
systems, in which the public is most interested, the 
people of Canada, through their Governments, 
have provided, or guaranteed, the payment of sums 
totalling $968,451,737. This works out at over 
$30,000 per mile of road. But even this is not all. 
In addition, they have granted great areas of land 
as yet unsold and unpledged. They have under- 
taken the construction of other lines whose cost will 
be an important addition to this large outlay. Fur- 
ther, in the case of some of the companies included 
above, to which they have given or lent large sums 
of money to meet pressing needs, unlike private 
lenders, who would naturally have demanded a 
security charged in front of all previous invest- 
ment, they have voluntarily accepted a charge 
ranking after the bulk of the private capital 
already put into the undertaking. . . ." 

When will the people of Canada "wake up" and 
take an intelligent interest in the business manage- 
ment of the country? Here we have the appalling 
spectacle of seven hundred millions of dollars of 
cash and land donations, and contingent liability 
incurred, to provide necessary railway communica- 
tion, while the State has not at this moment one 
dollar's worth of assets to show in return! There 



OUR TRANSPORTATION PROBLEMS 99 

cannot be the least doubt, that if, early in our his- 
tory, our Governments had planned a single rail- 
way trunk system for Canada, with provision for 
extensions as required, the entire cost could have 
been met out of this amount, and the country would 
today be the owner of all its railways without fur- 
ther liability. Above everything, there would be 
no operating problem to meet. The undertaking 
would be on a paying basis unless strangled by mis- 
management. Our childlike faith in our statesmen 
has been sublime. But perhaps the explanation is, 
that we have all been much too prosperous to 
bother about the nation's business. It is so much 
easier to "let George do it!" 

4. 

What is West and what is East in the United 
States? It varies with the flow of population. 
Chicago will soon be in the East. Ask the same 
question in Canada and there can never be any 
hesitation about the answer. We have in Canada 
an East and a West and a "no-man's land." And 
the pathetic part of it all is, that the latter divides 
the East and the West. 

I say "pathetic" advisedly. This division, made 
in the wisdom of God Almighty, is, and always 
must be, the controlling factor in the social and 
economic life of Canada. It is the great national 
problem — the great obstacle to national unity. It 
is more than a problem. It is a calamity! 

In the United States, they also have a no-man's 
land of desert and lava field. But, mark the dif- 
ference! The industrial East and the agricultural 



100 WAKE UP, CANADA! 

West form a fairly compact solid area there, with 
no-man's land beyond. And west of the desert lies 
tidewater and cheap ocean transportation. 

Canada's agricultural West is hemmed in on the 
East by a thousand miles of wilderness and on the 
West by another few hundred miles of the same 
character of country, the Rocky Mountains. We 
cannot hope for cheaper transportation in either 
direction. It is an unpleasant prospect. Our no- 
man's-land is now a perpetual tax on the people of 
the West and to some extent on the East as well. 
It is the key to the transportation situation in 
Canada. 

Well-meaning individuals, careless of their facts, 
sapiently assert that one of these days the despised 
lands lying between Manitoba and the settled por- 
tions of Ontario will supply homes for teeming 
millions and thus solve the problem. Let us at 
once dismiss from our minds any such attractive 
pipe-dream. That country is indeed a no-man's 
land and always will be. These are neither agri- 
cultural lands, nor are there minerals, nor timber ) 
resources, nor anything that will support a popula- 
tion. It will no more be developed than similar 
waste areas have been developed that to-day greet 
the eyes between Philadelphia and New York City, 
for the simple but conclusive reason that there is 
nothing to develop. Along the Canadian Pacific 
and Canadian Northern lines there is absolutely 
nothing outside of a small strip, "New Ontario." 
In the clay belt, along the National Transcon- 
tinental, there is some hope of a comparatively 
small agricultural development, but it will con- 



OUR TRANSPORTATION PROBLEMS 101 

tribute little to the solution of the problem as far, 
at least, as the present generation is concerned. 

The Grand Trunk Railway was chartered in the 
fifties to connect Montreal with Toronto. Look- 
ing at the map to-day, this system, while not per- 
haps playing the game of patriotism, nevertheless 
seems to have had an intelligent grasp of Canada's 
problem in transportation. It promptly con- 
structed and linked up with a system south of the 
line and secured entrances to Chicago, Portland, 
Detroit and other strategical points in the United 
States. With the opening of Western Canada, the 
obvious first step in transportation would, of course, 
have been to extend the Grand Trunk from Chi- 
cago, through St. Paul to Winnipeg, Portal, and 
westward to Vancouver over the present location 
of the Soo Line and Canadian Pacific. A further 
line from Winnipeg East to the Head of the Lakes 
would have given us a complete, sufficient and 
effective railway system through territory where 
almost every mile would have been traffic produc- 
ing, outside the Rocky Mountains. And the mile- 
age would have been shorter. Note how it figures 
out in comparison with the Canadian Pacific loca- 
tion north of Lake Superior: 

Southern Route Through United States. 

-Montreal to Toronto 338 Miles 

Toronto to Detroit 229 

Detroit to Chicago 284 

Chicago to Moose Jaw 929 

Moose Jaw to Vancouver 1,080 

2,860 Miles 



102 WAKE UP, CANADA! 

Northern Route, Canadian Pacific Railway. 

Montreal to North Bay 340 Miles 

North Bay to Fort William 652 

Fort William to Moose Jaw 818 

Moose Jaw to Vancouver 1,075 

2,885 Miles 



While there is little difference in mileage from 
Montreal west, from Toronto to Vancouver via 
Chicago would be only 2,522 miles, while the mile- 
age via the Lake Superior route, and the thousand 
miles of unproductive territory, is 2,885 miles. 

Our choice, practically, was whether to build a 
railway through a thousand miles of sterile and un- 
productive territory in Canada, or to build a 
similar distance through the United States, where 
advantage could be taken of local traffic to the ever- 
lasting benefit of the whole system and all its 
patrons. 

I shall, of course, at once be told, that it was 
Canada's duty, even in those early days, to provide 
a railway system of its own and not to be dependent 
upon a foreign country for transportation. And 
yet, the Canadian Pacific finds it feasible to-day to 
traverse the State of Maine to connect Montreal 
with St. John and Halifax in preference to making 
a long and expensive detour to the north. There 
would, however, be some force to this argument, if 
it could be shown that we are independent of the 
United States in other vital respects. But we are 
not. The very keystone of life, industry and steam 
transportation, particularly in a cold country, is 



OUR TRANSPORTATION PROBLEMS 103 

coal. Ontario and Quebec, in fact, the largest pro- 
portion of Canada's population at this moment, 
depend utterly and entirely on the United States 
for its fuel supply. In case of war, if such a condi- 
tion could even be imagined, Uncle Sam would 
calmly stop our coal shipments and then turn over 
and go to sleep and our railways, industries and 
homes would be destroyed in a very brief period! 
This is literally the situation as it exists to-day and 
probably as it always will be. At least, no one has 
so far indicated how it could be changed. Under 
the circumstances, it behooves us to look at the 
business side, rather than consider sentiment. There 
is very little room for sentiment in figuring the rate 
on either a bushel of wheat or a ton of coal. 



Shortly after Confederation, overtures were 
made to British Columbia to join the family of 
Canadian provinces and territories. British 
Columbia's price was railway connection with the 
East, and, as a result, the Canadian Pacific was 
chartered and, after surmounting all sorts of 
obstacles and difficulties, was finally constructed. 
It stands to-day as a monument of efficiency and 
good management. Having obtained one full 
fledged, all-Canadian line through a thousand 
miles of unproductive territory, one would have 
thought that every possible concession had been 
made to those whose views on economical and effi- 
cient transportation were obscured by considera- 
tions of sentiment. But not so. During recent 



104 WAKE UP, CANADA! 

years two more lines, the Canadian Northern and 
the National Transcontinental, have been chart- 
ered and built through the same territory and at 
enormous public expense. Both have, of course, 
failed miserably and are now on the hands of an 
over-enthusiastic State, and present a problem that 
almost defies human ingenuity in unravelling and 
administering so as not to involve the absolute 
abandonment of millions of dollars of capital 
expenditure. That such will ultimately be found 
expedient, few rational people doubt at this time. 
It is refreshing to recall, that when the charter of 
the National Transcontinental came before Parlia- 
ment, Sir Robert Borden, at that time leader of the 
Opposition, advanced the suggestion, that the 
Canadian Pacific line between Winnipeg and 
North Bay should be nationalized and improved, 
and all roads given running rights over it. This, 
of course, was the rational step for Canada to have 
taken, but the suggestion, emanating from the 
Opposition, could not be accepted. It would have 
looked too much like business methods. So it was 
promptly ridiculed by the Government of the day, 
and speaker after speaker dwelt on the enormous 
development that was to take place in the West, 
and predicted that the traffic available would soon 
be beyond the power of all three lines to cope with. 
And thus were fastened on Canada's wrists the 
manacles that will be there for generations after 
the amateur railway builders of that period have 
joined their forefathers. 






OUR TRANSPORTATION PROBLEMS 105 

6. 

I have elsewhere referred to the danger of en- 
trusting Governments with the unchecked expendi- 
ture of enormous sums of public money. I have 
suggested a small independent board, without 
whose endorsation important proposals might be, 
at least, delayed, or even abandoned without cast- 
ing the responsibility directly upon the Govern- 
ment. The most striking example of how such ill- 
digested and ill-advised action may lead the coun- 
try into the worse than useless expenditure of mil- 
lions of dollars, is probably the Hudson's Bay Rail- 
way, part of which has already been constructed. 

For many years there has been an agitation in the 
West for an outlet to Hudson's Bay for agricultural 
products, chiefly grain. On the map, such a plan 
looks attractive, but time and again, the route has 
been investigated by fairly competent authority, 
and has been uniformly condemned. The con- 
tinued agitation, in spite of these adverse reports, 
is one of the extraordinary manifestations of human 
nature, difficult to account for satisfactorily. The 
explanation probably is, that the persistent request 
for the opening up of this route came chiefly, in 
fact entirely, from the farming class, and that no 
steps had ever been taken by the authorities to 
acquaint these people with the true facts. Govern- 
ments apparently labour under the delusion, that 
when an item appears in the metropolitan papers 
of the East it automatically percolates to the 
extreme ends of rural districts. The Government 



106 WAKE UP, CANADA! 

might advantageously make the acquaintance of the 
agricultural press of Canada. 

The question, however, remained the subject of 
continual agitation, and was in due course incor- 
porated in the platform of the organized farmers 
of the West. Then it was projected into politics. 
The late conservative party, of blessed memory, 
thereupon undertook to deal with the matter in a 
practical way. A further investigation was made 
and the report this time seemed to look more 
promising, and the Government, with a laudable 
desire to redeem its promises, made provision for 
immediate construction as a Government under- 
taking. 

The outstanding fact in Canada's transportation 
situation today is, that we have three separate and 
distinct transcontinental lines, where two would be 
ample for all the business that is likely to develop 
for many years. The third is the proverbial fifth 
wheel to the wagon, and serves no other purpose 
than to absorb traffic that is badly needed by the 
other two, in order to operate economically and 
efficiently on a basis of reasonable rates. The build- 
ing of a fourth grain-carrying route could have no 
other effect than to multiply further the difficulties 
of existing lines, and to embarrass further the 
situation generally. In the face of these conditions, 
the only sound justification for constructing this 
road would apparently be an absolute certainty, 
that a very large reduction in the cost of carrying 
the Western wheat to market would result. 

But the most cursory consideration indicates that 



OUR TRANSPORTATION PROBLEMS 107 

there is little hope of any such benefits being de- 
rived from the Hudson's Bay route. The rail mile- 
age from Western grain producing points to Port 
Nelson, the Hudson's Bay terminal, is very little 
shorter than to the Head of the Lakes, and it has yet 
to be shown, that grain can be carried cheaper from 
Port Nelson to Liverpool than from Fort William 
to the same port, taking higher insurance rates into 
consideration. Apart from this, the season of 
navigation via the Hudson's Bay route only extends 
over a few weeks and closes in most years before 
the Western grain movement is well started, so that 
the bulk of the grain would necessarily have to be 
held over until the following year at very large 
expense. I cannot do better than quote the sum- 
ming up of the Royal Commission on Railways and 
Transportation on this subject: 

". . . . We understand that construction 
work on the Hudson Bay line has been suspended. 
We think that the work should not in any case be 
recommenced till more urgent needs have been 
met, and money is more easily procurable. And if 
the work on the line is begun again, we think it 
should be done in the most economical manner 
possible, and only up to the standard of a local 
line, bearing in mind that it cannot be expected for 
many years to come to be self-supporting. Con- 
sidering the small advantage in rail mileage from 
the grain-growing areas, which the Hudson Bay 
possesses over the existing routes to Port Arthur, 
and that from many districts it possesses no advan- 
tage at all; considering further the short and un- 



108 WAKE UP, CANADA! 

certain period of navigation in the bay, and that 
grain consigned to Port Nelson will consequently 
always be liable to be detained there for nine 
months till navigation is again opened; consider- 
ing that higher ocean freights may be expected to 
absorb, if not more than absorb, any possible sav- 
ing in rail rates, we cannot believe that this route 
will ever secure any serious share in the export 
trade. Still less can we think that it will handle an 
import business. Unless considerable mineral 
wealth should be discovered in the territory which 
this line will open up, it must, we fear, continue to 
be almost indefinitely a burden upon the people of 
Canada. And everything that can be done should 
be done to make this burden as small as possible. 

I! 

It was recently stated in Parliament that some 
twenty million dollars has now been spent on this 
undertaking. Over six million dollars has gone on 
terminals at Port Nelson. Canada has thus one 
more white elephant on her hands. A business 
concern, realizing the enormity of such a blunder, 
would charge the expenditure incurred up against 
profit and loss and forget about it, if it could. But 
Governments must put up a bold front. They 
never admit errors. That would be fatal, poli- 
tically. We shall, therefore, in all probability, see 
construction work resumed there one of these days, 
and by further profuse expenditure of public 
funds, a new system will be created to compete for 
the limited class of traffic it will be capable of 
handling, and thus cut the throats of the two trans- 



OUR TRANSPORTATION PROBLEMS 109 

continental lines the Government is now struggling 
with, which will, in any event, eat up millions of 
the taxpayers' money in deficits, for many years to 
come. 

I have no cut and dried remedy to offer for such 
a dangerous state of affairs. That it is the product 
of sheer ignorance is clear. Why should it be pos- 
sible for any small group of men, probably lacking 
outstanding business ability, to pledge the country 
to purposeless expenditure of millions of dollars 
merely to satisfy the importunate demands of a 
class of citizens badly informed on the subject of 
the proposed expenditure? It is entirely wrong. 
The Government must, of course, in the end assume 
full responsibility to Parliament for any and all 
expenditure, but it should be possible to provide 
checks against action based on insufficient informa- 
tion and immature decisions. It is to be hoped, 
that the new National Railway directorate will be 
authorized to take this matter in hand and have it 
investigated and weighed in the balance as a com- 
mercial proposition, and without the least consid- 
eration of any political ends to be served. 

7. 

We have in Canada now three great railway sys- 
tems, namely: (1) The National system, compris- 
ing the Canadian Northern, National Transcon- 
tinental and Intercolonial; (2) The Grand Trunk, 
including the Grand Trunk Pacific and (3) The 
Canadian Pacific. Negotiations are pending to 
amalgamate the first two systems, as recommended 



110 WAKE UP, CANADA! 

in the Drayton-Ackworth report. The Grand 
Trunk Pacific has, however, been taken over under 
the receivership of the Minister of Railways. 
Amalgamation with the Grand Trunk would leave 
only two systems — the National and the Canadian 
Pacific. We may, I think, safely take it for 
granted, that such will be our ultimate railway 
line-up. 

So far, the present Government has proceeded 
with commendable energy and promptness and a 
board composed of very able men has been ap- 
pointed to direct the operations of the amalga- 
mated Government railways in Canada. The per- 
sonnel of the new organization, from the President 
down, also bears the stamp of efficiency. This is 
an evidence of good faith on the part of the present 
Government and a determination to keep the man- 
agement free from political influence. 

The capitalization per mile of the lines now 
included in the new system is illuminating. The 
Intercolonial embracing 1,941 miles of lines is 
capitalized at $71,000 per mile. If interest is in- 
cluded, which it should be, the capitalization 
would be over $100,000 per mile. 

The National Transcontinental, comprising 
1 ,81 1 miles of railway, was a veritable sink-hole for 
public funds. It represents actual expenditure of 
$92,000 per mile and, with interest charges capital- 
ized, stands the country at approximately $11 3,000 
per mile. 

The Canadian Northern system was, on the 
whole, very economically built, although consider- 



OUR TRANSPORTATION PROBLEMS 111 

able further expenditure will be needed to bring it 
up to standard. It cost the country a total of about 
$45,000 per mile, including interest charges, and 
embraces somewhat under 10,000 miles of line. 

The Grand Trunk Pacific was also a very costly 
undertaking, though well built. It includes 1,748 
miles of lines, which, with the rolling stock, cost 
over $100,000 per mile. 

The Canadian Pacific system now ranks as one 
of the world's colossal institutions. In Great 
Britain, and in foreign countries, the words are 
magical. They mean "Canada." It is true, that 
this railway has in past years received much public 
assistance and many valuable privileges and con- 
cessions. But let us not forget, that after all these 
good things had been showered upon the enterprise 
with lavish hands, a period came when Canadian 
Pacific stock did not look nearly as attractive as it 
does today, when, in fact, wages had to be paid by 
promissory notes and financial men had to rally 
around the enterprise to save it from going on the 
rocks. Then the settlement of the West com- 
menced and the company gracefully sailed into 
smoother financial waters. And it was well for 
Canada that it did so. 

There can be no reasonable doubt, that the pro- 
posed amalgamated national railway system will 
start business, in point of gross earning power, not 
very far in advance of where the Canadian Pacific 
was thirty or more years ago. It will labour under 
all kinds of handicaps, some of them subject to 
solution, whilst others will remain as a millstone 



112 



WAKE UP, CANADA! 



around its neck. An enormous capital cost has 
been piled up against these lines and fixed charges 
per mile will probably be soaring high above any- 
thing hitherto known in transportation in new 
countries. Very drastic additions have already 
been made in freight rates in sympathy with the 
higher wage awards, and it is very problematical 
whether the producers and consumers of Canada 
will tamely submit to further increases. The 
farmer of the West will realize, that every rate 
increase is simply a further tax of so many cents 
per bushel on his wheat necessitated by reckless 
public administration. Operating expenses of the 
National system must be fully covered either by 
higher rates or by taxation. The Government will 
certainly favour the former. 

Here we are at once confronted with a difficulty. 
While the National system must have higher rates 
to pay even its bare operating and maintenance 
expenses, the Canadian Pacific is able to render 
precisely the same services at a much lower cost 
and still pay a satisfactory dividend to its share- 
holders, and therefore, does not require increased 
rates. But, obviously, rate increases cannot be 
made effective on the National system without also 
extending them to the Canadian Pacific, or every- 
thing would be routed over the latter and the 
National system would have no traffic. We, there- 
fore, clearly perceive that the introduction of com- 
petition in railway transportation in Canada has 
actually had the direct effect of enormously in- 
creasing our freight rates. 



OUR TRANSPORTATION PROBLEMS 113 

When the final general rate increase took place 
in the latter part of 1918, the Government saw this 
problem. Rates had to be enormously advanced; 
or all the lines comprised, or to be comprised, in 
the National system, would go bankrupt. The 
Canadian Pacific, on the other hand, being able to 
carry on without any considerable advance in 
rates, a bargain was made whereby, in considera- 
tion of a twenty-five per cent.^ increase in freight 
rates being granted, the Canadian Pacific would 
submit to special taxation to enable the Govern- 
ment to collect, for the benefit of the public, a cer- 
tain part of its surplus earnings. The Western 
farmer will, of course, carry the bulk of this bur- 
den. The compromise made, however, was the 
only possible way out. 

8. 

While we are now irrevocably committed to the 
great adventure of State ownership and operation 
of railways, on a magnificent scale it is clear that 
we embarked on the enterprise with both eyes wide 
open, which is all to the good. The step was taken 
in the face of a somewhat disastrous experience 
with the Intercolonial system, covering many years. 
Consequently, we laboured under no delusions 
whatever as to the obstacles in the way. Further- 
more, we were presumably in full possession of 
the facts surrounding the operation of British and 
American railway systems by the State in those 
countries. "Forewarned is forearmed." In order 
to emphasize the enormity of the problem and the 



114 WAKE UP, CANADA! 

vast issues involved, it may be useful to offer a few 
words of comment on the financial aspect of State 
operation of railways across the line and in Great 
Britain during the war years. The final outcome 
of our enterprise will depend largely on well-in- 
formed and tolerant public opinion. 

The operation of United States railways was 
taken over by the State as a war measure, but it is 
an open secret that it was designed as the first step 
towards permanent Government ownership. The 
larger issue now hangs in the balance owing to the 
recent change in the political control of Congress. 
Unified operation naturally led to vast economies 
in the abolition of freight solicitation and public- 
ity, the consolidation of ticket offices, routing of 
freight over shortest mileage, reduction in number 
of highly-paid executives, and in various other 
directions made possible by the creation of a State 
monopoly. 

The report of the administration showing the 
comparison between the operations in February, 
1919, and the corresponding month in 1918 is now 
available and is interesting reading. The situation 
in the latter year was complicated by extremely 
cold weather and heavy snowstorms, reducing 
operating efficiency, so that February, 1919, might 
be expected to show a very favourable comparison. 
Gross earnings increased 61 million dollars over 
1918, a gain of 21 per cent. Operating expenses, 
however, increased 62j/> million dollars, or 24 per 
cent. The United States Government took over 
the railways on an agreement to compensate the 



OUR TRANSPORTATION PROBLEMS 115 

shareholders on a basis of the average net earnings 
for the three pre-war years. February, 1919 rfalls 
short 37 million dollars of meeting this guarantee. 
January of the same year produced a deficit of 55 
million dollars! 

This unfavourable showing is not primarily due 
to inefficiency in operation, although competent 
authorities claim that State management is not 
sufficiently elastic in promptly reducing staff and 
other expenses in slack periods. The important 
factor, however, is increased labour cost. The 
Government has advanced wages by approximately 
one billion dollars per annum since taking control. 
The American railway worker has, since 1915, had 
his annual wages increased from an average of 
$800 to an average of $1,400. To offset this, pas- 
senger rates have been increased 50 per cent, and 
freight rates 25 per cent., which was estimated to 
produce sufficient revenue. This apparently it has 
failed to do so far. The United States was in the 
fortunate position, at the outbreak of war, of enjoy- 
ing very low rates, and railway labour was fairly 
well paid. Otherwise the situation would have 
been impossible. The public simply would not 
have submitted to the increases imposed and appar- 
ently still to be imposed. It now seems that the 
United States cannot afford to turn the railways 
back to their owners and meet the tremendous lia- 
bility created, nor does it appear feasible to take 
them over in the face of the necessity of imposing 
further unpopular rate increases to meet cost of 
operation and return on capital investment. 



116 WAKE UP, CANADA! 

Turning to Great Britain, we find the situation 
frankly desperate. The disturbing factor there 
has, of course, been the impossibility of increasing 
the staggering pre-war freight rates without creat- 
ing a condition where the entire traffic of the coun- 
try would revert to the ancient highways and the 
railways be left idle and bankrupt. Railway capi- 
tal in Great Britain has for some years been on a 
4% earning basis and the lines were taken over by 
the Government on a guarantee of this earning. 
The annual gross earnings have been 680 million 
dollars, wages 250 millions, taxes 25 millions and 
materials 155 millions, leaving net earnings to 
shareholders 250 million dollars per annum. 

The British railway worker had been on an aver- 
age annual wage of $350. The Government was 
quickly confronted with a demand for increases 
which could not be compensated by transferring 
the burden to the public. Railway workers there 
have now received eight separate increases, bring- 
ing the average per man up to $900 and adding 400 
million dollars to the annual operating cost. To 
this, increases in cost of materials have added an- 
other 140 million dollars. The annual pay-roll 
now is 650 millions. Including the 4% rental, it 
now costs the Government yearly 1,220 million 
dollars to operate the railways — an increase of 80% 
over pre-war days — and taking into account the 
50% increase in passenger rates, the total gross 
revenue is only 780 million dollars. The estimated 
annual deficit is thus 440 million dollars! There is, 
of course, only one way out of this muddle, namely, 



OUR TRANSPORTATION PROBLEMS 117 

for the State to take over the railways and pass the 
burden on to the people by means of general taxa- 
tion. It cannot be done by increasing freight rates. 

In Canada we have had three general freight 
rate increases; in 1916 about 5%, 15% in March, 
1918, and 25% during the following August, mak- 
ing a total advance over the pre-war standard of 
slightly over fifty per cent. It is significant, that 
when the various freight rate advances were an- 
nounced in Canada comparatively little public 
comment was caused. It was, of course, generally 
considered a regrettable, though unavoidable, inci- 
dent and the situation was philosophically dis- 
missed with a patient shrug of the shoulder and 
public attention was soon diverted to more inter- 
esting and impressive domestic affairs — such, for 
instance, as the latest baseball news and the state of 
the golf course. The attitude of the "man on the 
street" on these occasions demonstrated strikingly 
his extraordinary apathy towards the vital issues 
facing his country. Needless to say, these rate deci- 
sions were among the most momentous events in 
Canada's history. They brought into effect the 
heaviest tax ever imposed on the people of this 
country. 

Transportation cost enters into every item of 
individual expenditure from a theatre ticket to a 
ton of coal, just as surely and effectively as an 
import tax. If our National railway system piles 
up heavy deficits, the country must meet them, 
wholly or partly, out of general taxation. We may, 
therefore, justly regard increased transportation 



118 WAKE UP, CANADA! 

cost as a tax, and a somewhat vicious tax, which no 
one can evade. Whether it is levied by a Govern- 
ment or by a licensed corporation is quite immater- 
ial in its effect. This is the point of view I desire 
profoundly to impress upon the mind of the reader. 
Now, study carefully the following statement: 

Statement of Revenue for Fiscal Year 1916-17 
Thk Government of Canada: 

Customs Revenue onlv $134,043,842 

Total Taxation 158,543,115 

Average Customs Revenue for 5 

pre-war Years 89,060,000 

The Railways of Canada: 

Freight Receipts $215,245,256 

Passenger Receipts 61,290,291 

Total Operating Receipts 310,771,479 

The Government of Canada authorized a 50% 
increase of freight rates and approximately a 15% 
increase in passenger rates on all railways. The 
immediate effect of this ruling was, of course, that 
a consumption tax was automatically levied on the 
people of Canada amounting to about 118 million 
dollars per annum — exceeding by nearly thirty 
million dollars our normal annual import tax 
revenue and coming within forty million dollars 
of equalling the entire taxation revenue of Canada 
from all sources in the most prosperous year the 
country ever witnessed! Quite incidentally, the 
bare suggestion of reducing Canada's present pro- 
tective tariff is met with the hysterical shriek: 
"Where is our revenue going to come from?" We 
are apparently unable to comprehend how we can 



OUR TRANSPORTATION PROBLEMS 119 

partly convert a consumption tax of a round hun- 
dred millions into a direct tax of the same dimen- 
sions without becoming bankrupt. But we see no 
obstacle whatever to levying over night an entirely 
new additional consumption tax of 118 millions! 
We "strain at a gnat and swallow a camel." The 
Canadian taxpayer is either a most inconsistent 
individual or, surely, we are rapidly losing our 
sense of proportion. 

Canada's railway situation is, of course, largely 
controlled by that of the United States. Increases 
in wages on the railways there are almost auto- 
matically duplicated in Canada. In studying the 
record of State operation of railways in Great 
Britain and across the line, the fact stands out 
prominently and clearly, that the one item of wage 
cost has been chiefly responsible for the disastrous 
results up to date. There is unquestionably a well- 
defined limit to rate increases. In Great Britain, 
unfortunately, they had reached this limit long 
before the war and had, therefore, no margin of 
safety to fall back upon. The United States has 
now increased freight rates by 25% as compared 
with our increase of 50%. It seems evident that 
Canada must take this whole situation most ser- 
iously. What effect, for instance, would any fur- 
ther rate increases have on the production and 
development of the West, which necessarily bears 
the lion's share of the burden by reason of the long 
haul? Have we, in Canada, reached the uttermost 
limit we can pay for transportation and exist, just 
as they did in Great Britain years ago, and will our 



120 WAKE UP, CANADA! 

present and future railway deficits here have to be 
covered by general taxation, as will assuredly have 
to be done in Great Britain? Will our agriculture 
and industries be strangled if further overburd- 
ened? 

I am expressing no opinion upon the past de- 
mands of railway labour for wage increases. They 
may have been entirely warranted. But I do know, 
that they were not acceded to because they were 
warranted, but because they had to be granted to- 
avoid internal warfare at a time when we were 
fighting overseas. That was quite apparent. As 
the wages bill is the controlling factor in railway 
rates, it is reasonably certain, that the railway 
worker cannot be permitted to be the sole judge of 
what his remuneration shall be, as he practically 
has been since the war began. The logical con- 
clusion is, that the kind of railway management 
that can most successfully resist unreasonable de- 
mands by labour, will in the end be the most suc- 
cessful. Any other sort may speedily destroy our 
country. This apparently will be the fire test of 
State operation in Canada. Let there be no mis- 
take about it, our railway problem completely 
overshadows all others in vital importance, includ- 
ing the questions of public debt, fiscal policy or any 
other national issue. And yet, comparatively few 
seem to worry over it particularly! 

9. 

It is clear, that our new national system of rail- 
ways starts life under the severest handicaps in the 



OUR TRANSPORTATION PROBLEMS 121 

way of high capital charges per mile, coupled with 
unnecessary duplication of lines. However cap- 
able the management, these handicaps are there for 
all time to come. The obvious course to pursue is 
to inaugurate a well conceived and energetic colon- 
ization policy. Unfortunately, most of the vacant 
lands along the Canadian Northern and Grand 
Trunk Pacific in the West are owned by the Cana- 
dian Pacific Railway, the nation's only competitor 
in transportation. This company is naturally inter- 
ested in attracting settlement to its own system and 
perhaps is not over-enthusiastic in assisting in the 
creation of traffic for the National lines and may, 
therefore, prove somewhat unsympathetic. But 
the tendency towards special taxation of unoccu- 
pied lands may constitute a convincing argument 
in the end and induce the company to fall in with 
any feasible plan to colonize the vast areas along 
the Government system that are not traffic produc- 
ing at present. 

The Canadian Northern location in the West is 
tributary to what is perhaps the best part of that 
country. In time it will be a gold mine in the way 
of traffic. The Grand Trunk Pacific is not, how- 
ever, in the same fortunate position. It traverses 
much inferior country, but may be expected to 
yield fair traffic returns as development takes place. 
The Canadian Pacific taps the main wheat produc- 
ing areas of Saskatchewan and Alberta and will 
probably always command the greater freight ton- 
nage. The country served by the National system, 
being largely covered with poplar and, therefore, 



122 WAKE UP, CANADA! 

inclined to produce a softer wheat, will be settled 
chiefly by smaller land-holders, who will special- 
ize in dairying, live stock, etc. This class of settle- 
ment will in the end sustain a larger population 
than the southerly parts served by the Canadian 
Pacific. The outstanding problem of the National 
railways in the West is unquestionably rapid colon- 
ization, with a view to the creation of the largest 
possible volume of profitable traffic. 

As to the Eastern section of the National system, 
it is obvious, that the "clay belt" lands along the 
National Transcontinental in Western Ontario 
present a special problem in colonization that 
might well engage special attention. This is essen- 
tially a proposition that lends itself most effectively 
to colony settlement on the part of a class of people 
willing to go into a country remote from civiliza- 
tion and to take up the task of clearing land. That 
class can be found neither in Great Britain nor in 
the United States. Efforts towards colonizing 
French-Canadians could profitably be made. They 
have always had a preference for wooded areas. 
The only possible hope, however, of settling that 
country systematically and expeditiously, lies in 
bringing colonists direct from Europe, through a 
special agency organization. Suitable induce- 
ments must also be offered to these settlers by the 
State, particularly an adjustment of freight rates 
to ensure a profitable market for pulpwood for the 
pioneer period. The Scandinavian countries, par- 
ticularly Norway and Sweden, as well as Finland, 
should offer the best field for specialized effort in 
this direction. 



OUR TRANSPORTATION PROBLEMS 123 

The Dominion Government has now created a 
department to deal with the problem of coloniza- 
tion, which is presided over at present by one of the 
ablest members of the cabinet. No comprehensive 
policy has as yet been officially announced and can- 
not, therefore, be discussed here. This department 
will doubtless have the old sectional jealousies to 
combat. Every district will expect its fair share of 
settlers. But, it is reasonably safe to assume, that 
the people of Canada will demand concentrated 
effort to colonize its own railway system in prefer- 
ence to sending settlers elsewhere. Canada is now 
in the railway business, and every department of 
the Government should be called upon forthwith 
to co-operate actively. 

10. 

This is the "morning after." We are well over 
our railway "spree." We are just wakening up to 
the sickening realization, that we must now pro- 
ceed to pay the price for incompetent administra- 
tion and political debauchery. The wild spectacle 
of the past twenty years of railway construction 
seems like a dream; no attempt at co-ordination or 
system; branch lines, parallelling existing lines, 
freely chartered and guaranteed. The ambition of 
every western hamlet to have two or three systems 
competing for its trifling business has been grati- 
fied. No thought was given to the economic waste 
and the killing rates to which all this would 
ultimately lead. 

Canada has, by passing enabling legislation and 



124 WAKE UP, CANADA! 

extending Government guarantees, wilfully and 
deliberately, brought into being the existing state 
of affairs. We must now shoulder the burden with 
the best possible grace we can, and proceed to live 
with our mile of railway for every 205 inhabitants, 
while the republic to the south, many times more 
highly developed, worries along with a mile for 
every 254 inhabitants. We have failed to realize, 
that efficient transportation service and low rates 
are only the result of wise investment and good 
management. We elected the men who led us into 
all this, so it is only retributive justice, that we 
should be called upon to pay the price for our own 
folly. 

Our transportation situation today is in a mess — 
a most unholy mess. The most important factor in 
the development of a new country has been bungled 
in every conceivable manner and the problem of 
the Government now is to "unscramble" the eggs. 
We have been pushed headlong into the owner- 
ship and operation of what is now one of the great- 
est transportation systems of the world. 

The people of Canada are on trial. The whole 
principle of public administration is now about to 
be discredited or vindicated, as the case may be. 
Will the blighting and destroying shadow of party 
politics be cast over this enterprise? Or, shall we 
rise in our might and command our political lead- 
ers to continue to keep hands off? And shall we 
loyally submit to such burdens as the men entrusted 
with the unravelling of this tangled skein may 
deem it wise to impose upon us. 



OUR TRANSPORTATION PROBLEMS 125 

Everything will depend upon the attitude of the 
press and people throughout Canada, and it is de- 
voutly to be hoped, that each individual news- 
paper will see its way clear to drop partisanship in 
this matter and fully acquaint itself with the true 
situation in order that our citizens may be properly 
instructed, and sympathetic support afforded the 
public-spirited men who have now assumed the 
responsibility of bringing order out of chaos while 
endeavouring to transform a wild conglomeration 
of railway lines into a reasonably well-balanced 
system. If they meet with even medium success, 
Canada will owe them a debt of gratitude she will 
never be able to repay. We have made many poli- 
tical blunders in this country since Confederation, 
but none to equal this. We cannot afford to make 
any more of this magnitude. 

It is above everything to be hoped, that the peo- 
ple of Canada will take this plain and unmistakable 
lesson deeply to heart, and will not in the future be 
easily carried off their feet by "railway policies" 
cunningly contrived by unscrupulous politicians, 
without any regard to the real interest of the coun- 
try, and solely designed to return to power party 
factions who, having no record as wise and capable 
administrators, must, forsooth, offer some spec- 
tacular and expensive innovation, thus bribing a 
silly and shallow electorate with its own good 
money. We should hang our heads in shame at 
having been such callow dupes! 



126 WAKE UP, CANADA! 

11. 

Most of us in Canada have by this time lost our 
party orientation. We may still have "leanings," 
but the present political hodge-podge leaves one 
confused. New parties and policies will arise out 
of the ashes of discarded principles and party 
shibboleths. What worries me most is, whether, 
in the course of time, some opportunist political 
leader will arise and persuade his following, that 
the cure for all Canada's transportation ills lies in 
the immediate absorption by the State of the Cana- 
dian Pacific system. Then, indeed, would our cup 
be full! 

His arguments would be plausible and might 
carry conviction with the poorly-informed section 
of the community. A "loser" and a "winner," 
thoroughly mixed, would balance! The mixing 
process might,of course, be disastrous, but that is a 
detail. Alluring pictures would be painted of eco- 
nomies that could be effected through single con- 
trol of all railways in Canada and a theoretical case 
might readily be built up which could be made to 
look attractive to the voter and might ultimately 
result in carrying a political party into power to 
make good such a programme. 

Public pronouncements on this subject have 
recently been made by the Chairman of the Cana- 
dian Pacific, Lord Shaughnessy, as well as by Mr. 
Beatty, the President of that company. These have 
been couched in language of great moderation. No 
tendency whatever has been manifested of throw- 



OUR TRANSPORTATION PROBLEMS 127 

ing down the gage of battle. Both have, in effect, 
stated, that the case is one for watchful waiting and 
deep consideration. Intelligent public opinion 
cannot be formed on this subject until we see results 
from the great experiment Canada has now em- 
barked upon in operating a railway system second 
only to that of the Canadian Pacific. 

In a comprehensive and well-reasoned statement 
to the press, Mr. Beatty recently said : 

. • . . The desire of everyone is that Canada should 
have to-day a railway system, or systems, so administered 
that the best service to the public will be obtained at the 
lowest rates consistent with fair wages, both for labour 
and capital. I say fair wages, because without them effi- 
ciency, loyalty and enterprise cannot be obtained, and with- 
out these things the quality of work which ensures efficient 
operation and low rates cannot be secured. The question 
therefore is: Will Government ownership bring about this 
result? The question sounds simple but is in reality com- 
plex. Theoretically much may be said in favour of 
Government ownership. Will those theories stand the 
test of practice. If these theories prove a failure initially, 
but correct themselves, in course of time, as their expon- 
ents may urge, how long a time can Canadian people afford 
to pay the losses on demoralized railroad service ? Do they 
wish to launch out on the experiment now, or wait until 
their near neighbours, the United States, have worked out 
their experiment a little more satisfactorily? The cost 
of our own experiment could not fail to be great, a cost 
certain to be collected, directly or indirectly, from the 
pockets of the Canadian people. Railway men have an 
admirable slogan which I feel inclined to commend to the 
attention of the people of Canada at this moment, namely, 
"Stop, Look and Listen." 

I have my own views on public ownership of railways, 
but they are not unalterable. I am undoubtedly prejudiced 
by an association with one company. That company has 
slowly developed to a point of efficiency and successful 



128 WAKE UP, CANADA! 

operation. Looking back over that history one is amazed 
at the importance of the part played by men whose enter- 
prise, resourcefulness and tenacity of purpose could not, 
I think, have been stimulated and given rein in any Civil 
Service. It has taken more than thirty odd years to make 
the C.P.R- as efficient as it is to-day. It was not easy. 
The consciousness that it is so easily shattered is largely 
responsible for the constant and intense ambition on the 
part of officers and men to maintain, and even improve on, 
the tradition. 

This much may, it seems to me, be said with confidence 
now, namely, that we do not know enough that is encourag- 
ing about Government operation of large railway systems 
to justify any further excursions into that field at this 
time. To argue from the experience of old countries where 
civil service obtains a much better share of the ambitious 
young men than in Canada, or to argue from the alleged 
success of comparatively local affairs, or Government or- 
ganizations dominated by exceptional personalities, is 
unfair — not to the railways, but to the country which has 
so much at stake in this issue. We can well afford to 
wait, to study dispassionately our own situation, and the 
experiment of the United States, before committing our 
country to serious changes in policy. The solution finally 
adopted in the United States will be of inestimable value 
to Canada. Meantime too, the experience which Canada 
will now have of the present newly organized Government 
system will demonstrate many things. It will indicate 
very largely the general nature of the results we may hope 
to secure from an extension of the system. . . . 

I sometimes think it is a great pity, that the rail- 
ways of this continent have given so little informa- 
tion to the public upon what has actually been 
achieved by them. It is a surprise to most people 
to be informed, that in no country on the globe are 
freight rates as low as they are in Canada and the 
United States. The low rate at which freight is 
carried here is one of the marvels of the world and 



OUR TRANSPORTATION PROBLEMS 129 

the admiration of railway operators in other coun- 
tries. As has been shown, in Great Britain, railway 
rates are ruinous. It has been asserted, that prior 
to the war, a hundred pounds of merchandise could 
be carried from Victoria, on the Pacific coast, by 
rail to Montreal and from there across the Atlantic 
to Liverpool, cheaper than the same consignment 
could be shipped from Liverpool to the north of 
Scotland! Even the Government-operated rail- 
ways on the continent of Europe charge much 
higher freight rates than we are accustomed to pay 
on this side of the Atlantic. 

We cannot afford to be carried off our feet by 
cheap sentimentality or clap-trap. The principle 
of Government ownership and operation of rail- 
ways looks attractive, but, as far as operation is 
concerned, it is just now being placed on its trial 
in Canada under fair conditions. Let us not for- 
get what wonders private or corporate enterprise 
has performed for us in the way of cheap trans- 
portation, and, above all, let us not overlook the 
stimulating effect of two great railway systems 
competing for patronage in Canada. Each will 
keep the service of the other well tuned-up. Tak- 
ing all the circumstances into consideration, it is 
my firm belief, that our present problem in trans- 
portation will most effectively be met by leaving 
the Canadian Pacific system severely alone and 
consolidating, under national ownership and man- 
agement, all other lines in Canada. Let us sus- 
pend judgment on the larger issue until we have 
reasonably conclusive practical experience to guide 

5 



130 WAKE UP, CANADA! 

us. In the meanwhile, it behooves us to beware of 
the demagogue ! 

11. 

When we come to analyze the present railway 
problems in Canada and to seek the causes that led 
the country into the unpardonable and almost 
hopeless position we now find ourselves in, it will 
be clear, that almost the chief responsibility lies 
at the doors of our Western provincial govern- 
ments, who, purely for political purposes, and 
usually on the eve of general elections, undertook 
to guarantee the bonds of branch-line extensions so 
as to be able to go to the electorate on a "strong" 
railway policy. If such provincial guarantees had 
not been forthcoming, the Canadian Northern sys- 
tem, at least, could not have been financed. The 
Province of Manitoba had undertaken contingent 
liability in this respect to the extent of 25 million 
dollars, Saskatchewan 42 millions, Alberta 59 mil- 
lions and British Columbia 81 million dollars! The 
Federal Government was then compelled to step in 
and take over the entire system, thus practically 
relieving the various provinces of a financial 
responsibility that might easily have brought them 
to the verge of bankruptcy. 

Here lies another fatal weakness in our constitu- 
tional scheme — the principle of divided authority 
in the chartering of railways. We have seen, that 
in the end the responsibility must fall on the Fed- 
eral Government. We have now, or are about to 
have, two great railway systems in Canada. Nei- 
ther of them will require inducements to provide 



OUR TRANSPORTATION PROBLEMS 131 

adequate facilities anywhere in Canada. Each of 
them is perfectly able to finance extensions without 
guarantees. Such being the case, what justification 
exists for leaving in the hands of provincial author- 
ities powers to charter new lines for political pur- 
poses, which might force the hands of the Govern- 
ment system or, at any rate, prove seriously em- 
barrassing? The "National Railways" will not 
be unduly conservative in its policy of branch-line 
extensions and the Canadian Pacific has always 
been well abreast of the times. But Canada can no 
longer consent to have its railway policy disturbed 
by any handful of voters who chose to settle in 
localities remote from transportation facilities, and 
who have the means of terrorizing apprehensive 
provincial Governments. There is admittedly cry- 
ing need for branch-line extensions into many well- 
settled parts of the Canadian West today, which 
should be satisfied. All others should be given 
short shrift. 

In the United States, they are now endeavouring 
to get away from the absurd spectacle of dual con- 
trol of railway matters, under which State legis- 
latures have the power to impose all sorts of ridic- 
ulous restrictions on the operation of railways 
within the State boundaries. This has been a fruit- 
ful source of annoyance and loss and has been 
largely responsible for the low physical condition 
some of the roads found themselves in when the 
war broke out. We should follow suit in Canada 
and vest in the Federal authorities complete con- 
trol and sole jurisdiction with respect to railways, 
and to their chartering and capitalization. 



CHAPTER SEVEN 

THE LABOURER AND HIS HIRE 
1. 

IN these days the subject of industrial relations 
is the favourite theme of conversation where 
men foregather. Limited or complete Government 
control of great industries and transportation dur- 
ing the war, and Government jurisdiction over 
wages and industrial earnings, which automatically 
followed, seem to have created a new precedent, 
which appeals irresistibly to the imagination of the 
worker. He now thinks he sees the end of "capital- 
ism" and the dawn of a new era. There is conse- 
quently, much irresponsible talking, chiefly on the 
part of the professional labour agitator, who pre- 
fers that sort of occupation even to a six-hour day 
of honest work. 

Ominous statements are made from time to time 
indicating serious unrest on the part of labour. Mr. 
Tom Moore, President of the Trades and Labour 
Congress of Canada, at a Canadian Club luncheon 
in Toronto, recently said, in part: — 

". . « . I tell you, if you are content to wait 
until revolution has taken place, you will have the 
upheaval in Canada as they had it in Russia. . . 

"I know the temper of labour, and I know that 
it is one that insists that it shall reap a fuller reward 
for its share in industry. I am not afraid of unrest, 

(132) 



THE LABOURER AND HIS HIRE 133 

I rather welcome unrest. But we want to see un- 
rest of a practical nature, such as is diverted into 
channels of construction. We must construct un- 
rest in such a way that it will bring the greatest 
amount of happiness. But unfortunately today, not 
all unrest is being diverted into channels of con- 
struction. . . . 

"Happiness shall be the measure of efficiency for 
the future. . . . 

"What steps can be taken to this end? The first 
need is to relieve the worker of some of his toil. It 
is the worker who should profit by the improve- 
ments of machinery and modern industry. . ." 

Labour in Canada has seldom enjoyed outstand- 
ing leadership. The Gompers type has been con- 
spicuous by its absence and no leader has appar- 
ently enjoyed the confidence of organized labour 
for more than a brief period. Mr. Moore seems, 
however, to be a broad-gauge individual and not 
afraid to speak his mind to his constituents. Trade 
unionism in Canada has been destructive more 
often than constructive. What substantial advan- 
tages labour has gained in the past, have not been 
won by constitutional means, but rather by the 
cruder method of industrial warfare. This is a sad 
commentary. 

The life of the labour leader is not a happy one. 
He is made the target of torrents of abuse by the 
rank and file of his own class. He obviously can- 
not "lead" and also hold a regular job at union 
wages. But as soon as he becomes the salaried 
employee of the organization, he automatically 



134 WAKE UP, CANADA! 

loses caste with his fellows. If he is one of the high 
officers of a central labour body, he is, in the dis- 
charge of his duties, called upon to meet prominent 
men in business and public life. It is becoming 
the fashion now to consult labour. However 
extreme he may have been in his views, he soon 
finds that employers are generally very approach- 
able and quite decent fellows, earnestly anxious to 
assist in improving the lot of their employees. 
After a while the labour leader broadens out and 
becomes more tolerant. He is then apt to be 
accused of having betrayed the "cause" and sold 
out to capital. Labour has a lesson to learn. Lead- 
ers must be selected not out of admiration for the 
particular brand of fiery oratory they are able to 
deliver, but rather for their integrity and common 
sense. And they must be loyally supported and not 
made the targets of venomous attacks by jealous 
competitors for office. Labour must practise loy- 
alty to its leaders, and team work. 



Now let us get down to a consideration of funda- 
mentals. Our whole civilization is built on a basis 
of reward for services. This reward, usually paid 
in money, the individual utilizes to buy his meals, 
his bed, his clothes, etc. Certain men work very 
hard and spend very little and, in the course of 
years, accumulate a surplus. That is "capital." If 
put in a savings bank, this capital earns a reward 
for the owner. That is "interest." The bank in 
turn lends this "capital" to a manufacturer, who 



THE LABOURER AND HIS HIRE 135 

uses it, in his business, and pays the bank a reward 
for the privilege out of the profitable utilization of 
such loan. This is what we call "capitalism." If, 
however, the bank lent this money to the Govern- 
ment, who utilized it in building or operating a 
shoe factory, the Government must still pay interest 
for the privilege and, therefore, exact a profit on 
each pair of shoes made. But then we should call 
it socialism! How can "capitalism" or the "profit 
system" be abolished without utterly destroying 
our civilization and reverting to barbarism? We 
are merely confounding terms. 

We find then, that neither Governments, individ- 
uals nor corporations can get the use of capital 
without compensation. Also that capital must 
ordinarily be profitably employed to pay this com- 
pensation. You can call this profit on capital 
"dividend," or you can call it "interest." It comes 
to precisely the same thing. As long as we have 
currency or, in fact, any convenient medium of ex- 
change, we shall have savings, i.e., capital. We 
shall also have a lending and a borrowing class, as 
the world has had from time immemorial. We 
obviously cannot abolish the use of borrowed capi- 
tal or the profit system, i.e., capitalism, without 
also abolishing the official medium of exchange as 
well as all individual property rights. That at 
once clears the atmosphere. 

The inquiry that now faces us within each in- 
dustry is, (1) What is a fair reward for labour? 
(2) What is a fair reward for capital? I take it, 
that these points are entirely legitimate subjects 



136 WAKE UP, CANADA! 

for investigation and discussion and contain in 
a nut-shell all the worker is really vitally inter- 
ested in. His problem is not to invent some silly 
new social system, but to see that he gets his proper 
fair reward now. Capital must come down from its 
high horse. Liberty to capital is conceded; license 
is not. Inordinate profit persisted in will bring 
self-destruction in its train. Labour has its claims 
and the consumer will have something to say to the 
profiteer as well. The war may be over, but the 
"new spirit" remains. We must have a fair deal 
all round, and woe be unto him who blocks the 
way! 

We are treated nowadays to a great deal of con- 
troversy regarding the essentials of religion versus 
the refinements of theology. The whole question 
of industrial relations is very much on a par with 
these discussions. We are confronted, on the one 
hand, with the reactionary element and, on the 
other, with a school of theorists, who cannot ap- 
proach the question short of a complete social 
revolution, and with the bewhiskered Bolshevik 
who can only talk and think in terms of gore and 
destruction. There seems to be no common rally- 
ing point anywhere. 

Are we to concede, that such very plain and 
clear-cut business propositions as are involved in 
determining the fair compensation and fair work- 
ing hours for labour, the fair reward for adminis- 
tration and management, and the fair reward for 
the use of capital, cannot be solved without resort- 
ing to violence and industrial warfare? If they can, 



THE LABOURER AND HIS HIRE 137 

how are they to be settled? The burning of factory 
buildings and slaughtering of employers, as in 
Russia, will not find any solution. Where, I ask, 
are labour's "Fourteen Points?" Agriculture has 
submitted her proposals. Is labour unable to settle 
down to an exhaustive consideration and recap- 
itulation of her own problems and grievances? 

3. 

The war has brought to the surface many uncom- 
fortable questions for our statesmen to ponder over. 
The most uncomfortable of all is doubtless, the 
whole problem of the relations of capital to labour. 
During the war it was treated with the same degree 
of aloofness that one displays towards a stinging 
nettle, or the little black animal with the white 
stripes down the back. The policy was to patch up 
industrial disagreements, with the result that the 
bodies of labour and industry now present a most 
unique appearance. They carry one patch after 
the other, some overlapping, and all colours and 
kinds of material were used in the mending pro- 
cess. And the tragedy of it all is, that we have no 
cloth on hand out of which to make a decent new 
suit, so that labour and industry may present a 
respectable appearance on the final declaration of 
peace. Decidedly, we have nothing to be proud of 
in Canada with respect to our attitude, past and 
present, on this subject. We have gone to sleep 
comfortably instead of thinking constructively and 
practising preparedness. In the meanwhile, Great 
Britain has been doing pioneer work along novel 



138 WAKE UP, CANADA! 

lines from which, I sincerely trust, we may also 
derive benefits. 

Our greatest need today is stability in industrial 
relations. How can this be even hoped for with 
local unions of every trade represented in every 
town between the Atlantic and the Pacific, each 
separate unit fighting its own local battles in its 
own clumsy, ruthless way? Labour under such 
conditions also becomes itinerant, naturally gravit- 
ating to the centres enjoying the highest union 
scale. Is there any necessity or justification for this 
preposterous continuous turmoil? Is there any 
valid reason to-day for variation in wage scale 
within most trades? The cost-of-living statistics 
clearly show, that there is little or no difference in 
living expenses anywhere in Canada now. If, how- 
ever, there is any necessity at all for differentiation, 
it surely could be amply provided for by an East- 
ern and Western minimum scale based on official 
cost-of-living figures. 

Employers throughout Canada would also be in 
a much better position under uniform and more 
stable wage conditions. Competition would be on 
a fairer basis and contracts could be entered into 
for longer periods with the assurance that irrespon- 
sible agitators could not precipitate strikes in ad- 
vance of the termination of existing agreements. 
Labour would also feel, that Dominion-wide in- 
vestigations and agreements dealing with wages 
and working conditions in each trade would be 
more likely to be based on justice and fairness to 
the worker, than the purely local victories that 
may be gained. 



THE LABOURER AND HIS HIRE 139 

It is however, obvious, that a uniform wage scale 
could not blindly be imposed in connection with all 
trades. Underground mining earnings, for in- 
stance, being almost invariably on a contract basis, 
are essentially governed by local physical mining 
conditions. Cost-of-living also is not, by any 
means, the infallible test or the sole factor to be 
considered. Climatic conditions might seriously 
limit the number of possible working days in the 
year in any particular district. Seasonal occupa- 
tions also might require special consideration. The 
new spirit will concede to labour the right to pro- 
per cognizance of enforced idle time and its effect 
on annual earnings. It is not the daily but the 
annual income that must in the end govern. 

We cannot set back the hands of the clock at will. 
Labour unrest is not a product of to-day or yester- 
day — it has been with us in increasing volume for 
many years. Its present solution is going to be the 
job of a real statesman, far-seeing, wise and sym- 
pathetic. Whatever the final outcome, the verdict 
of the next generation will be, that the predatory, 
autocratic and altogether stupid employer, whether 
he falls within the capitalist class or not, must 
shoulder the blame, as well as the consequences, 
just as the blame for our present drastic prohibi- 
tion measures falls justly on the shoulders of the 
rapacious, unprincipled class which made the bar- 
room the sink of iniquity and immorality that 
finally destroyed it and all its works. 

In the meanwhile, we have been blundering 
along in Canada without any attempt being made 



140 WAKE UP, CANADA! 

to create machinery to set our industrial house in 
order. We have machinery to deal with indus- 
trial disputes, but none to prevent them! The 
situation is growing more desperate each day and 
the breach between labour and capital is widening. 
The Western Labour Federation in a recent con- 
vention frankly declared war on capital. The only 
official remedy so far offered is to increase our 
military establishment! 

4. 

The Industrial Reconstruction Council in Great 
Britain is a body having for its object propaganda 
with a view to awakening a national interest in the 
need for a complete system of industrial autonomy. 
This council strongly favours the "Whitley 
scheme," which has now been adopted by the 
British War Cabinet as part of its reconstruction 
policy. 

The central idea in the Whitley scheme is ab- 
solutely and admittedly sound, which is more than 
can be said for Canada's present labour legislation, 
designed solely to cure the evil when prevention is 
what modern society demands. 

The underlying principle of this plan is a real- 
ization that each industry is a unit with its own 
problems to solve. The scheme contemplates the 
organization of an "Industrial Council" within 
each industry, possibly embracing collateral indus- 
tries as well. The idea is to bring together, for the 
solution of questions of mutual interest, all the 
factors in each trade, representing capital, manage- 
ment and labour. 



THE LABOURER AND HIS HIRE 141 

There is not to be the slightest interference with 
the Trade Union organization. As a matter of 
fact, the hope is entertained, that the Trade Union 
should be, if anything, more of a factor than it has 
been in the past. Nor is it the intention, that there 
should be any interference with the individual 
management of industries. An industrial council 
would be composed of representatives of associa- 
tions of employers and associations of working 
people and would thus become a Parliament, or 
representative body, for the discussion of all mat- 
ters referred to it by employers, men, or manage- 
ment, and by any legislative enactment. No Coun- 
cil can be formed without the consent of both 
employers and employed. 

It is contemplated that these bodies should give 
effective assistance to the Government in regard to 
the question of demobilization. With an industry 
completely organized in this manner, information 
can be given in regard to the number of men 
required at any time, and place, and to what extent 
employment will be available in the immediate 
future. Mr. Whitley himself summarizes the main 
objects of the plan in the following language : — 

"» . . . We want to destroy suspicion be- 
tween employer and workers and put in its place a 
mutual confidence born of mutual understanding. 
We seek to regularize employment, impart indus- 
trial training, utilize inventions, prosecute indus- 
trial research, improve design and quality and 
promote legislation affecting workshop conditions. 

"Hitherto the employers have had rather too 



142 WAKE UP, CANADA! 

much to say in industry. Our organization is triple 
in character — in workshops, in districts and nation- 
ality. Thus we feelthat we can come to grips with 
a problem in all its enormous detail — works, rules, 
distribution, working hours, peace prices, meth- 
ods of wage payments, grievances, holidays, physi- 
cal welfare, discipline, terms of engagement, 
training apprentices, technical libraries, sugges- 
tions for improvement in methods, investigations 
of the causes of reduced efficiency, collections for 
clubs and charities, entertainment and sport. . ." 

The most important feature of the scheme is to 
furnish a body where labour problems can be de- 
liberated upon and solved. It is not the intention, 
that the industrial councils should take the place of 
wages-boards, but it is expected, that the question 
of contract between employer and employee could 
be most effectively dealt with by a body of this sort 
in each separate trade and with some degree of cer- 
tainty that the sacredness of contract would be 
respected by both parties. Each trade will require 
to solve its own problems in its own way. But if 
it can be done at all, it surely can best be done 
through organizations such as are contemplated 
under the Whitley scheme. There is scarcely any 
limit to the useful functions of such a series of 
organized bodies, completely representing the 
various factors in each industry. 

The ultimate consumer will stand the present 
condition of rank anarchy only up to a certain 
point. All parties to the perpetual dispute will 
apparently be well advised to settle it before he 



THE LABOURER AND HIS HIRE 143 

speaks. Strikes or lock-outs can only succeed if 
backed by public opinion. Public opinion will 
support no party in any dispute who refuses to sub- 
mit his case to the decision of a competent and dis- 
interested investigating and conciliating body. 

We are very apt to reach the comfortable con- 
clusion, that we are making sound, but gradual, 
social progress and that schemes of evolution can- 
not be disturbed or accelerated by drastic action, 
with impunity. History does not warrant any such 
conclusions. Centuries ago, the Incas in Peru and 
elsewhere lived under a very highly developed 
socialistic system, including communistic owner- 
ship of land. This was absolutely destroyed by the 
Spaniard, with his alleged superior civilization. 
He introduced in its place the Inquisition, slavery 
and degradation. The theory of evolution failed 
to work. So with industrial relations today. Let 
us not fall into the error of supposing, that far- 
reaching, drastic changes must be resisted. We 
may be face to face with a maximum wage for 
capital just as we are now confronted with a mini- 
mum wage for labour. I see no important differ- 
ence in principle. At any rate, we had better get 
used to the idea. 

It will perhaps look somewhat drastic even to 
suggest the idea of a maximum reward for the use 
of industrial capital. The principle involved how- 
ever, cannot be successfully assailed. In order to 
ensure that even-handed justice shall be meted out 
to all, the modern State now absolutely controls 
railway capitalisation and rates. How long would 



144 WAKE UP, CANADA! 

the country tolerate extravagant dividends on rail- 
way capital without demanding rate revision? 
There is apparently no particular reason why capi- 
tal employed in any other enterprise should be 
regarded as more sacred and inviolate than rail- 
way capital and be given carte blanche to exploit 
its labour, or prey on the consumer. 

The obstacle to any completely effective and fair 
control of general industrial earnings, lies, of 
course, in the practical difficulty of forecasting 
business results with comparative precision. The 
danger of losses in operation from entirely unfore- 
seen causes is always present. To meet this risk, 
capital very properly demands compensation or 
insurance. Actual dividend payments can be con- 
trolled however, without inflicting any undue 
hardships or hampering industry in any way. This 
we do now partly by means of taxation, which, 
when everything is said, will perhaps be found to 
be the fairest and most effective method of curbing 
profiteering. 

5. 

But apart entirely from any future State restric- 
tions upon returns on industrial capital, the present 
tendency is very distinctly towards the elimination 
of spectacular profits. Labour is becoming in- 
creasingly insistent upon the most favourable 
terms for itself and concessions will doubtless be 
forced in each industry until capital, with all the 
cards laid on the table, is able to convince the 
worker that the absolute limit of safety has been 



THE LABOURER AND HIS HIRE 145 

reached. In the end, outside competition will, of 
course, absolutely determine the limit of reward 
to capital as well as to labour. Industrial capital 
may thus ultimately be confronted with the choice 
of destructive warfare or the surrender of auto- 
cratic control, and the inauguration of new and 
improved relations with the workers. This pros- 
pect ought not to be so terrifying. Community of 
interest in the end should keep the balance true 
and it may well be, that the handling of intelligent 
labour, impressed with its responsibilities, would 
entail less anxiety on employers than under present 
conditions. There might even be an efficiency 
gain, constituting, or even exceeding, the utmost 
limit of "team work" contemplated under the 
Whitley scheme. 

But, while the proposal to admit labour repre- 
sentation to participate in the actual business man- 
agement of industry is theoretically sound, it is 
open to certain very material objections. Labour 
has apparently no definite policy on the subject 
beyond the hackneyed assertion, that the worker, 
being equally as important as capital in our indus- 
trial scheme, is, therefore, entitled to equal partici- 
pation in the dictation of business policy. This is 
a false conclusion based on very defective rea- 
soning. 

The lack of understanding and indecision shown 
by organised labour in its relations with capital 
are almost pathetic. There are leaders of every 
shade of opinion on the subject, ranging all the way 
from ultra Conservatives to those who preach Bol- 



146 WAKE UP, CANADA! 

shevik doctrine and even go beyond. The mind of 
the rank and file is confounded with high sound- 
ing, but meaningless, phrases, such as the "democ- 
ratisation of industry" and the "abolition of capi- 
talism." These, of course, lend themselves readily 
to oratorical flights. What does it all mean? Do 
we want to go even farther than the Russian luna- 
tics who, by the way, have not even commenced to 
abolish capitalism? They have stolen the savings 
of millions of, more or less, deserving people and 
have appropriated the same for the benefit of the 
State. They have also filched the savings of still 
more deserving people in other countries by 
repudiating their external debt and seizing prop- 
erty representing foreign investment. Meanwhile 
they are printing spurious "money" by the billion. 
Why? Because the State can no longer borrow. 
No one will trust it. So it manufactures its own 
money. That is, it issues formal "promises to pay" 
and that, of course, is capitalism. The time will 
come when a workman, earning perhaps a thou- 
sand roubles per month, will not be able to buy his 
three meals a day with it, just because his money is 
worthless. There is neither value nor security 
behind it. 

We have in Canada an external capital liability 
of at least five billion dollars, the particulars of 
which are given elsewhere. We also have an addi- 
tional internal investment of some thirteen billions. 
All this money is employed in our railways, indus- 
tries, mines, farms, etc. We do not owe this vast 
amount to either Rockefeller or to Morgan. It 



- THE LABOURER AND HIS HIRE 147 

chiefly represents the accumulated savings, through 
weary years, of millions of hard working, frugal 
people, in Canada and in foreign countries, some 
now living and some dead. A multitude of 
orphans, widows, aged, infirm and humble people 
the world over, depend upon the returns from this 
investment for their daily bread. Insurance funds, 
trust funds — savings of all sorts — make up the bulk 
of this huge investment. An inconsiderable part 
of it is, of course, owned by "bloated" capitalists, 
but we cannot discriminate, except through the 
channel of income taxation, which we are already 
doing. Is anyone sufficiently crazy or unmoral to 
suggest seriously that Canada should formally steal 
this money by confiscating property and abolishing 
all right of private possession? That is just what 
they did in Russia. What labour really means 
when it talks about capitalism is, I am sure, merely 
a policy of acquiring public ownership of industry, 
which, of course, is an entirely different thing. The 
Government under such a system, simply com- 
pensates the owners for the capital value of existing 
private enterprise and assumes its liabilities. 

But whether the Government secures ownership 
of industry by borrowing the capital necessary or 
issuing securities therefor, or whether private 
enterprise remains in control, the use of capital 
still entails absolutely competent responsibility for 
its safe and profitable employment. It must yield 
interest or dividend, whatever we prefer to call it 
and whoever may be its director. This principle 
must ever guide in determining business policy. 



148 WAKE UP, CANADA! 

Much working capital is also temporarily bor- 
rowed in nearly every industrial enterprise. The 
bank lends largely on the known record of execu- 
tives to conduct business along safe and sound lines, 
and as a further safeguard against reckless business 
policies, personal guarantees must be given by 
every individual member of a directorate when 
bank advances are made. 

Active and real participation by labour in in- 
dustrial business management and policy construc- 
tion, is not, therefore as simple a proposition as 
appears on the surface. Financial responsibility 
being absent, purely complimentary labour repre- 
sentation on a Board of Directors or Executive 
could not hope, or expect, to do more than advise 
those who must bear the entire risk of failure, 
involving perhaps, not only the total loss of the 
fruits of years of inremitting toil, saving and sac- 
rifice invested in the enterprise, but also the loss of 
prestige and the possibility of being called upon 
personally to liquidate guaranteed liabilities. 
Until labour assumes financial responsibility, as an 
investor, or contributor guaranteed in some way, 
it obviously cannot share in the dictation of busi- 
ness policy. Incidentally, one of the chief obstacles 
to successful Government operation of industry, is 
precisely this very absence of financial responsibil- 
ity on the part of a paid management, with noth- 
ing to lose in case of failure beyond a job. The 
position of the labourer director or executive 
would be identically the same. 

Labour's relationship to industrial management 



THE LABOURER AND HIS HIRE 149 

is not, however, the only question to be considered. 
It is generally admitted, that capital has been self- 
ish and predatory in its attitude towards the 
worker. But labour presently organised and be- 
came reasonably successful in obtaining redress of 
its grievances. The consumer, on the other hand, 
has been absolutely helpless. He also feels, that 
he has been exploited. To be quite frank, it is 
doubtful whether existing industrial relationship 
is nearly as important an issue, from the point of 
view of the welfare of the general public, as the 
joint attitude of capital and labour towards the 
patient consumer. Cause and effect now follow 
each other with startling rapidity as never before 
in the history of the world, and the consumer is 
becoming more alive to his interests as affected by 
industrial disputes, wholesomely educated and 
vitally interested. Strikes, resulting in higher pay 
for transportation workers, for instance, forthwith 
give birth to correspondingly increased rates on 
railways and street car systems. Increased wages 
for miners are followed by increased coal prices. 
The load is instantly transferred to the public, 
which was probably not represented in the settle- 
ment of the dispute at all. 

Past experience and past record give the con- 
sumer no assurance whatever, that labour control- 
ling industry would be less unscrupulous and less 
predatory than capital has been. Many fear, and 
with good grounds, that it would be even more so. 
At any rate, if the State ultimately has to step in, 
industrial relations cannot safely be adjusted to the 



150 WAKE UP, CANADA! 

advantage of labour alone. The consumer has 
vital interests at stake that completely overshadow 
even those of capital and labour combined. The 
problem is decidedly a three-cornered one. On the 
whole, there can be no reasonable doubt, that what- 
ever would be the fate of the consumer, labour will 
probably always get a better deal under private or 
corporate control of industry than under State 
operation, where the consumer would represent the 
paramount interest and exercise influence accord- 
ingly. Wise labour leaders, both in the United 
States and Canada, are beginning to fear industrial 
State aggression. They realise, that while labour 
and capital in collusion may successfully exploit 
the consumer, to their own advantage, the moment 
the State steps in, the day of "easy money" may be 
over. They do not wish deliberately to invite the 
consumer's representative to become a factor in the 
dispute. They are not blind to the menace that 
lurks behind the notion, that selling-prices are just 
as readily regulated as rewards to labour and to 
capital. The State will not tolerate the principle, 
that the consumer shall pay all "the traffic will 
bear." Labour would apparently be well advised 
in adjusting its differences with capital amicably 
and speedily. It has nothing to gain by State inter- 
ference or socialistic organisation. 

6. 

Many of those who loudly deplore the present 

condition of labour, and sympathetically refer to 

the worker as a "wage slave," are equally emphatic 

in their denunciation of the "profit system." The 



THE LABOURER AND HIS HIRE 151 

inference is, I presume, that industry should not 
be carried on for profit or gain. Does that vague 
and peculiar creed mean that no interest is to be 
paid on capital invested in industry? Or does it 
mean that labour, having control, may freely take 
any profits it chooses by way of extravagant wages? 
Or is the State to conscript labour to manufacture 
at cost for the benefit of the consumer, paying for 
such services in food, lodging, clothes and medical 
attendance? Or does all this sensational vapour- 
ing merely indicate, that we are, at present, eco- 
nomically out of balance and, that the reward paid 
to capital, the wages paid to labour and the price 
paid by the consumer should be readjusted? There 
is, apparently only one way to abolish the "profit 
system" and that is to abolish individual property 
rights, and our monetary system and then to put 
everyone to work for the State, which would pay 
for his keep. This is advanced socialism. 

Let us try to visualise the modern Utopia func- 
tioning on such a plan. Imagine, that the follow- 
ing simple story is from the "Official Eye Wit- 
ness." We may, one of these days, read its exact 
counterpart in the Russian newspapers. . . . 
Individual ownership of property had been abol- 
ished, which necessarily also involved the abolition 
of wages. We proudly ceased to be Wages Slaves. 
Under the new dispensation we were all working 
for a meal ticket. If, by the way, we lost it, we 
simply had to file an application in triplicate for a 
new one and cheerfully starve until we received it. 
Of course, we could not borrow. We were entitled 
to one pair of trousers annually, (regulation pat- 



152 WAKE UP, CANADA! 

tern), and if we wore the knees out prematurely, 
we were sternly commanded to parade before a 
Board of Inquiry to show cause why we should not 
be incarcerated for the reckless use of Government 
property. Our trousers were indubitably public 
property. Of course, no one ever surreptitiously 
appropriated our borrowed belongings, because all 
men had become simple, honest and industrious by 
Act of Parliament. 

The pre-digested, standard meal, compounded 
by Government, was a veritable poem. Back in 
the dark, unenlightened pre-socialistic days, when 
every individual minded his own business with a 
minimum of State assistance, opinions used to dif- 
fer as to what we should eat and what we should 
drink — particularly as to the latter. But a new 
era happily dawned. The dyspeptic now devoured 
with impunity his ration of the Standard bully 
beef stew, regardless of consequences, resting 
secure in the potency of the famous Act of Parlia- 
ment standardising the human stomach. The 
Hebrew recklessly consumed his ham and the 
Roman Catholic his Friday roast beef, religion 
and the Creator having been abolished for failure 
to conform to the official standard pattern. The 
socialistic State obviously could not consistently 
recognise any Superior Being. The use of tobacco, 
Government Brand, became compulsory, with 
occasional disastrous consequences. The socialised 
State ever meted out impartial justice! 

Our educational system at first proved a trouble- 
some issue. Later it was absolutely standardised. 



THE LABOURER AND HIS HIRE 153 

It goes without saying, that the State could not 
tolerate special privileges or opportunities being 
accorded anyone, such a policy would inevitably 
have led to undemocratic intellectual inequality. 
To entirely overcome the danger of this, a simple 
Act of Parliament was quietly slipped through 
making the stupid wise over night, and reducing 
those endowed with exceptional wisdom and in- 
telligence to the official intellectual standard. Com- 
petition and ambition were necessarily completely 
abolished. No worthy patriotic citizen would 
even wish to rise above the dead level. Besides, 
why worry? Were we not all working for the irre- 
ducible minimum of three meals per day and a 
standard Government bed with the loan of the 
necessary clothing? We were all kings! 

Candidly, we nearly came to blows on the ques- 
tion of occupations. This problem we soon found 
contained the crux of the whole situation. In the 
socialistic State — founded on the theory of ab- 
solutely equality — self-determination or individual 
choice of occupation could not, of course, for a 
moment be countenanced. Neither could the merit 
system. Promotion became obsolete and also, of 
course, discipline. The State officially declared 
all occupations equally important and honourable 
and desirable. We however, experienced some 
difficulty in persuading the men in the stoke-hole, 
that they were just as pleasantly situated as the 
captain of the ship, but eventually they recognised 
the truth and smothered their unworthy ambition. 
Everyone worked his silly head off solely from a 



154 WAKE UP, CANADA! 

sense of public duty. At first, some men actually 
preferred a medical career to that of an undertaker, 
while aspiring and hopeful embryo bank-managers 
foolishly expressed disappointment at being as- 
signed to honourable janitorships. But the nation's 
work had to be done. Some quite unique innova- 
tions were incorporated in the new occupational 
scheme. The streets, of course, had to be swept, 
rags picked and old bottles collected. These, being 
light jobs, suitable for the aged, ultimately fur- 
nished an excellent and congenial retiring oppor- 
tunity for cabinet ministers, college professors and 
railway and bank presidents. The white overalls 
and the push cart became an outward and visible 
sign of nobility — a reward gracefully conferred 
upon distinguished citizens at the close of a more 
strenuous career in the public service. 

But dark days eventually overtook this ideal 
democracy. The people began to mutter. It was 
being dimly realised, that the modern overseer was 
just a stupid, arrogant official. He became an 
object of intense hatred. We even lamented the 
exit of the defunct capitalist employer of the old 
regime. Instead of being "wage slaves" we had 
merely become slaves without wages! Finally, an 
inspired reformer wrote a new and up-to-date ver- 
sion of "Uncle Tom's Cabin" — and Utopia was 
triumphantly emancipated. 



A plea for a broad spirit of toleration is in order. 
The employer falls mentally into the error of asso- 



THE LABOURER AND HIS HIRE 155 

dating the employee with the proverbial highway- 
man with the motto : "Stand and deliver." Labour, 
on the other hand, is apt to picture the employer 
with horns on and cloven feet; as an unfeeling slave 
driver, rolling in luxury, whose sole object in life 
is to amass wealth at the expense of his "wage 
slaves," as the demagogue is fond of calling the 
employee. One has only to enter a motion picture 
theatre, almost at random, to find this conception 
of the case vividly thrown on the screen in a lurid 
melodrama and with all the harrowing detail. This 
view is evidently popular among the masses. In- 
cidentally, if the motion picture censors would give 
less attention to the accidental display of a bare 
leg or a wine bottle, and more to this pernicious 
propaganda to poison further the relations between 
employer and employee, they might perform valu- 
able public services. 

The Great War has had the effect of putting the 
socialist to the fire test and, incidentally, has 
brought home to many workers some very un- 
pleasant truths in regard to this much advertized, 
but little understood, system. No one can tell just 
what the socialist platform is. It is "all things to 
all men." Stripped of all camouflage, we might 
call it "humanitarianism." It is the creed, that 
everyone is entitled to work. That the remunera- 
tion shall be fair and the hours shall be reasonably 
limited. It is the same creed as that taught by Our 
Saviour and subscribed to by every decent civilized 
man since the world has enjoyed civilization. 

The great majority of employers in Canada have 



156 WAKE UP, CANADA! 

been on both sides of the question. The private 
life of the employer is of course, generally sur- 
rounded with more comforts than that of the em- 
ployee. This gives rise to envy and jealousy. It is, 
however, a rash assumption, to maintain that he 
gets more out of life than those of his employees 
who receive sufficient wages to dress, eat and sleep 
under decent conditions, and few of them do not. 
The employer generally works longer hours, sleeps 
fewer hours and eats less. The burden of respon- 
sibility rests on his shoulders. Few industrial con- 
cerns escape being confronted with grave crises 
from time to time, which drain the very life blood 
of those who have to face and solve them. The 
average small industry in Canada, which is the 
backbone of our industrial life, gives little more 
than a living for those engaged in it. The spec- 
tacular earnings are made in the large, merged 
industries, that are able to eliminate competition 
and control markets. The path of industrial pro- 
gress in Canada is literally strewn with failures, 
and the man who ultimately brings an industry into 
the safe haven of success has probably given the 
country more than he himself ever received. 

Years ago, I dreamed dreams, as an unsophisti- 
cated young man should. I saw myself as a cap- 
tain of industry — a sort of benevolent Ironmaster. 
That was immediately after I had been forced to 
acquire, through a chain of circumstances, a con- 
trolling interest in two western manufacturing con- 
cerns. I devoted myself, heart and soul to my task, 
but could not spare time to take the actual manage- 



THE LABOURER AND HIS HIRE 157 

ment into my own hands. For long periods the 
directors literally sweated blood over the problems 
that confronted them, and, incidentally, I devoted 
much capital, that I could ill spare from other 
interests, to the development of these industries. 
To-day my actual cash investment, over a period 
of fourteen years, is no trifling amount. It has, 
however, been most illuminating experience, which 
I do not in the least regret. 

I have just received the last annual statement of 
the larger of these industries. We manufactured 
$1 16,000 worth of goods. Our labour outlay was a 
little over $58,000, raw materials $37,000, over- 
head $18,000 and estimated profits $3,000. None 
of the shareholders, I should add, ever received 
a dollar's worth of dividend or salary or any bene- 
fit whatsoever from this investment. We have, 
on the contrary, voluntarily cancelled over fifty 
thousand dollars of common stock and bonds paid 
for in full, to take up losses on operation. I have 
spent many sleepless nights over it all. Our plant 
is modern and in excellent condition. We have 
never had labour trouble, because every just griev- 
ance has always been corrected. Most of the em- 
ployees are highly skilled men and have been with 
us for years, and are my very good personal friends. 
We have, at least, three different unions to deal 
with. Two of our employees act on our Board of 
Directors and on the Executive Committee. Our 
management has varied, but is now faultless and 
the industry is one needed in its community. But 
whenever we get to the point where a reasonable 



158 . WAKE UP, CANADA! 

profit is in sight, we are invariably face to face 
with an increased cost for labour! We have now, 
I believe, at last turned the corner. But it has 
taken many weary years. This is the literal truth. 
I often ask myself, pointedly: "Where do I come 
in?" 

I do not wish, in submitting this little human 
document, to attempt to mislead. Such an experi- 
ence as mine is not, of course, universal, but it is by 
no means uncommon. The development of a suc- 
cessful industry is frequently a slow and heart- 
breaking process. The chief owner of the smaller 
industry when he personally undertakes the man- 
agement, which he generally does, gets little more 
return for the use of his capital, experience and 
services, than a very moderate income. Labour is 
very apt to base all arguments on the earnings of 
the spectacular, monopolistic industries. That is 
no criterion at all. The backbone of our industrial 
structure is the smaller industries of the country. 

8. 

The uppermost idea when one talks to labour 
leaders is that labour must get its "share." What 
proportion this "share" shall bear to the whole, is 
impatiently waved aside. It is a mere detail. 
There is also no evident appreciation of the fact, 
that this somewhat intangible quantity is subject to 
very distinct limitations. It cannot be denied that 
a certain point is easily reached, when the break 
occurs where both labour and capital lose. This 
reasoning applies, of course, principally to com- 



THE LABOURER AND HIS HIRE 159 

petitive industry. Public service corporations, in- 
cluding railways, and non-competitive industries, 
can generally pass higher operating costs on to the 
public. In such cases, there is no limit to the wages 
that can be paid to workers as long as the public 
is willing to bear added burdens in higher rates or 
prices. 

Discussing labour conditions with employers, 
one finds a fairly unanimous sentiment against 
labour interference with discipline and shop- 
organization. As regards the wages question, those 
who are engaged in competitive industry are 
naturally alarmed. Those who are not, are peeved, 
but complaisant. They are quite ready to transfer 
the load to the public. They can stand it as long as 
the public can. They appear to have lost the sense 
of responsibility. 

And the public — the "man on the street," the 
farmer — he is bewildered. He is painfully con- 
scious of the fact, that the value of his dollar is 
shrinking faster than the number of his dollars is 
increasing. He is very busy himself "passing the 
buck" as far as he can, but he cannot pass it as fast 
as organized labour can. He is frequently several 
laps behind in this popular pastime. It seems to be 
a case of the endless chain. Wages are advanced in 
one industry, and until the general readjustment 
has been completed, the wage-earners in such in- 
dustry reap an advantage, purely temporary, how- 
ever. 

As a mere matter of commercial self-interest, 
labour must study business carefully. The question 



160 WAKE UP, CANADA! 

of satisfactorily adjusting wages, hours, and gen- 
eral conditions of employment is not always within 
the power of the employer. It will be conceded 
that labour is entitled to know something about the 
earnings of the employer. It will not, however, be 
taken for granted that inordinate earnings would 
be a justification for inordinate wages being paid. 
The public — the consumer — has an interest as well, 
which cannot be disregarded. Soon after Mr. 
Gompers' famous ultimatum to employers south of 
the line, one of their great weeklies, "The Saturday 
Evening Post," in commenting on his attitude, sum- 
med the matter up very fairly and completely as 
follows : — 

It was not necessary for Mr. Gompers to serve notice, 
that union labour will oppose any attempt to reduce wages. 
That is a matter of course- But the union-wage scale 
tells only half the story as to the condition of labour. 
The other half is told by the degree of employment or 
unemployment. A high union-wage scale does no good 
if labour is not at work. 

Labour is the largest item in the cost of goods. The 
American wage scale is much higher than any in Europe. 
If American labour is to be fully employed, or even 
relatively so, American goods must find a market abroad 
in competition with European goods. Nobody but a hope- 
less blockhead wants lower wages for their own sake. 
Nobody wants unemployment. The practical question i^ : 
How can we pay decidedly more for labour and still sell 
goods in free, competitive markets? For unless we do 
sell goods in such markets we shall finally have idle labour. 

There is only one possible answer: Our labour must be 
more efficient than the labour with which its products 
compete. 

It can be more efficient through its own superior skill 
and diligence, through using better tools — that is, better 



THE LABOURER AND HIS HIRE 161 

machinery — through superior, industrial organization and 
leadership. 

Every obstacle to the most effective organization and 
leadership sets the pointer to lower wages. Every handi- 
cap on invention, on ability, on improvement throughout 
the process of production and distribution menaces the 
wage scale. Every burden upon production through avoid- 
able capital-and-labour rows is inimical to it. LW.W., 
with its sabotage and general hostility to production, spells 
peril for it. Labour that proposes not only to get the 
highest possible wage, but to give the smallest possible 
return in productive effort is a drag on the wage scale. 

Nobody's sentiments are going to cut any particular 
figure in the answer. We can pay decidedly more for a 
day's work than Europe pays and still sell the product of 
our day's work as cheap as Europe can — or cheaper. But 
the only possible way of doing it is, to produce more or 
better goods in a day. We cannot pay decidedly more for 
labour than our competitors pay, unless our labour on the 
whole is decidedly more efficient. Every handicap to the 
most efficient application of American labour lessens its 
chance of maintaining this wage scale with full employment. 

The logic of the foregoing is irrefutable. 



In considering the question of a fair division of 
profits upon industry as between capital and 
labour, the investigator finds himself confronted 
with a great deal of shallow thinking. Unfortu- 
nately, there are vast difficulties in the way of 
obtaining reliable statistics on this subject. 

The Dominion Census Bureau has, however, 
compiled some illuminating figures bearing on 
Canada's industrial production, which are quoted 
elsewhere. These figures do not pretend to be ab- 
solutely complete and correct, but they cover 
35,000 industries, which is quite sufficiently ex- 

6 



162 WAKE UP, CANADA! 

tensive for all practical purposes. In a bulletin 
recently issued, further detail is given, which, with 
judicious estimating, is almost sufficiently com- 
plete to enable one to construct Profit and Loss 
Statement covering the operation of Canadian in- 
dustries for the year 1917, which apparently can- 
not be very far wrong. 

The total output is given as $3,015,506,869. The 
average wage of the worker was apparently $738 
and the net profit of industry $592 on each wage- 
earner's effort during the year. The following 
items enter into the cost of production: 

Sales $3,015,506,869 

Salaries $95,983,506 

Wages 457,245,456 

Materials 1,602,820,631 

General Overhead 239,373,046 

Depreciation Reserve 150,000,000 

Bad Debt Reserve 30,000,000 

Fuel 73,087,840 

Estimated Profit 366,996,390 

$3,015,506,869 $3,015,506,869 

Deducting the cost of production, $2,648,510,- 
479, from the value of the total output gives us 
$366,996,390 as the estimated net profit, which 
represents about \3% per cent, profit on the total 
investment of 2,773 million dollars. But it is safe 
to estimate, that at least one-third of the total in- 
vestment represents bond and other preferred 
capital on an average interest basis that would not 
exceed 6 per cent. We must also make due allow- 
ance for the fact, that the remaining two-thirds of 



THE LABOURER AND HIS HIRE 163 

the alleged capital is unquestionably inflated. To 
what extent it would be difficult to estimate, but, I 
think, we could safely reduce the total invested 
common stock capital, from two-thirds of the total 
to not more than one-half. This would give us, 
roughly, one billion of capital, earning a fixed rate 
of interest of 6 per cent, or 60 million dollars. 
Deducting this from the total earnings gives us 
approximately 300 millions to apply as earnings 
on the actual common stock investment of about 
1,500 millions, which would be a 20 per cent, basis. 

A return of 13J4 per cent, cannot be considered 
extravagant on industrial investment in view of the 
risks involved and also taking into consideration 
the fact, that 1917 was a war year with somewhat 
greater returns on capital than under normal con- 
ditions. The gist of the matter probably is, that 
the average small competitive industry in Canada 
made during 1917 a very fair return on capital. 
The larger, highly protected and monopolistic 
enterprises, in all likelihood made the spectacular 
earnings. It is also fair to assume that a ten year 
average, under normal conditions, would almost 
certainly show a basis of net earnings well below 
that of 1917. 

So we finally arrive at the conclusion, that, 
speaking generally, there is not very much to spare 
from the present estimated normal net earnings on 
industrial capital in Canada to permit of any im- 
portant general increase in wages. Nor can the 
worker apparently look to any considerable extent 
to schemes of profit-sharing to increase his earnings 



164 WAKE UP, CANADA! 

materially. From whatever angle we regard the 
matter, we find ourselves confronted with the un- 
comfortable situation, that, if higher wages are to 
be paid to Canadian industrial workers, it is quite 
evident that no considerable part of the burden 
can be assumed by capital. The bulk of the load 
must be transferred to the ultimate consumer, by 
means of higher prices for industrial products, 
resulting in a still higher cost of living all round: 
this will, of course, further curtail the purchasing 
power of the worker's dollar. The load however 
must be so transferred, if such transfer is possible. 
Other countries may produce more cheaply and 
undersell Canadian industries in the domestic 
market. Then there will be pressure brought to 
bear for increased protective duties, or — our indus- 
tries will become bankrupt and the worker lose his 
job. There seems no other alternative. 

I quite anticipate it will be asserted, that a net 
earning of $592 on the efforts of a worker paid only 
$738 for his year's work is an extravagant reward 
for capital. In fact, I have seen such an argument 
advanced on quite another set of figures, which, by 
the way, were erroneous. This would not be good 
reasoning although at first sight plausible. The 
cure for low wages is the more extensive use of 
power, thus increasing production per worker. 
The greater the amount of power used in indus- 
try, obviously the greater the capital investment 
and the greater must be the net return to capital 
for each worker employed. It will thus be clear, 
that there is no significance to be attached to a bald 



THE LABOURER AND HIS HIRE 165 

comparison of this nature. As throwing a side- 
light on the subject, I may mention that the volume 
of power used in Canadian industry for each 
worker is 56% greater than that used in British in- 
dustry. Also that the British worker produced a 
net output of $510 per head per annum, while the 
Canadian worker, according to our last Census 
Statistics, produced the enormous volume of close 
to $4,900 per head per annum. Here also we can- 
not draw exact comparisons. Much depends upon 
the nature of the industries and the amount of hand 
work and skilled labour required to complete the 
finished product. 

I am not trying to make a case for capitalism or 
to construct an apology for our present system of 
industrial management. My object merely is to 
endeavour to place the situation judicially and 
impartially before the worker and before capital. 
There is no useful object served in shutting one's 
eyes to obvious facts. We are unquestionably con- 
fronted with a crisis in our industrial relations. It 
is perhaps largely fostered by an erroneous con- 
ception of the actual situation, for there was never 
a time in the history of our country when clear 
thinking and plain speaking were such a necessity 
as they are today. Without them, we merely rotate 
uselessly, often perfunctorily and viciously, garb- 
ling real issues, killing time and misapplying effort, 
without even approaching fundamental questions 
crying aloud for fair and just settlement The 
best service anyone can render Canada today is to 
try to contribute something towards clearing the 



166 WAKE UP, CANADA! 

industrial atmosphere of mental fog and miscon- 
ception. 

10. 

The minimum wage agitation is worthy of deep 
consideration. It is nothing new. In the Fifteenth 
Century, magistrates in England, under Act of 
Parliament, fixed standard wages for agricultural 
labour. Certainly, the right of labour to a decent 
minimum wage cannot be challenged. If an indus- 
try is unable to pay a fair wage, based on cost of 
living, it had better perish. It is, of course, ab- 
solutely futile to accept cases like the Ford Com- 
pany as a fair comparison. While this concern is 
able to pay a minimum wage of $6.00 per day to 
its employees, it is to be noted carefully, that, at 
the same time, it can distribute 200% profits to its 
shareholders! There are few other industries in 
Canada in such a favourable position, perhaps 
none. It is quite in a class by itself. 

Whatever may be the attitude of the State 
towards the principle of a living minimum wage 
for labour generally, however, there is one aspect 
of the case that cannot safely be ignored in a civil- 
ized country, namely, the moral duty that rests on 
the community to ensure that a decent minimum is 
fixed at least in the case of female labour. That 
becomes a social question primarily. Much pro- 
gress has been made in this direction by large in- 
dustrial concerns in the United States. One of 
them, employing an enormous number of women, 
has recently decided upon a minimum of $16.50 



THE LABOURER AND HIS HIRE 167 

per week. Conditions in our larger Canadian 
cities in this respect are shocking. The Federal 
Government until recently employed girls in 
Ottawa at salaries below $10 a week! 

Before the Great War, labour conditions 
amongst the nations of the world varied consider- 
ably. In some countries, like Japan for instance, 
there was practically no leisure for the labouring 
man. Whole families worked on industrial pro- 
duction from 15 to 16 hours a day at starvation 
wages. Even in Europe, sweated labour was the 
order of the day in many industries. One result of 
these unequal conditions was the imposition of pro- 
tective tariffs as between nations. It was regarded 
as a reasonable proposition, that the products of 
white labour in Canada should not be expected 
to meet the products of Japan, China or even the 
European nations on an even basis. One effect of a 
protective system, would naturally be, that the 
home consumer pays an advanced price for the 
home-produced article, so as to permit of fair 
wages being paid to labour. The world is now in 
the melting-pot in regard to international labour 
relations, for the time has come when conditions 
must be equalized so as to eliminate unfair com- 
petition. It would almost seem as if the most 
important service that can be rendered labour in 
the reconstruction of the industrial world, would 
be international conventions dealing broadly with 
labour conditions and remuneration. An interna- 
tional labour congress is now at work in Paris on 
this problem and there seems ample scope for its 
efforts. 



168 WAKE UP, CANADA! 

11. 

It is possible that the hours of labour are too 
long in many occupations. The plan of introduc- 
ing a six-hour day is now being tried. A large com- 
mercial concern in Toronto is also going to experi- 
ment on a five-day week, which seems sound for a 
commercial business, if generally enforced. There 
is room for much constructive work and earnest 
investigation here. We rail at the miner for not 
working his full six days a week. But how many 
of us understand, that working thousands of feet 
underground with artificial light, under trying 
atmospheric conditions and surrounded by the dan- 
gers prevailing in many mines, tries the nerves of 
these men sorely, almost beyond human endurance. 
Steady work day after day becomes impossible. 

I cannot, however, agree, that 44 hours work per 
week is beyond what might reasonably be expected 
from the average human being, in most occupa- 
tions. Some occupations, I grant, take more out of 
the human frame than others and should receive 
special consideration. But a general standard is 
dangerous. We are bound to increase production 
in Canada today, to pay our war liabilities, and it 
surely cannot be done by further shortening the 
hours of labour. There is a school of benevolent 
theorists which maintains, that shorter hours means 
greater efficiency. To a certain extent that is true. 
A man can possibly do as much in ten hours as he 
would do in twelve, but there is a limit somewhere. 
No sane person would expect the same result in 



THE LABOURER AND HIS HIRE 169 

production from four hours' work as from twelve. 
The old rule of eight hours' work, eight hours' 
play and eight hours' sleep is perhaps the happy 
medium. 

Our population is growing slowly and labor- 
iously. We have, as a rule, no unemployment 
problem, except perhaps during brief seasons. On 
the other hand, we have an almost perpetual labour 
scarcity. We cannot, therefore, shorten hours 
radically without decreasing production, which, 
with our present national liability, would be almost 
fatal. During short periods of extensive unem- 
ployment such might safely be done, but as an 
industrial policy it would be suicidal. In the 
seasonal occupations, such as the building trades, 
the workers have long enforced holidays during 
the winter. To shorten their hours further during 
the limited season in Canada is not sound. 

There is another very important feature to be 
considered. In this age of strenuous industrial 
competition, when overhead expenses must be dis- 
tributed over the largest possible output, it is evi- 
dent, that capital investment in machinery, plant 
and equipment cannot be permitted to lie idle for 
eighteen hours out of the twenty-four, simply in 
order that labour may enjoy a six-hour day. The 
ability of industry to pay fair wages depends solely 
on output. If labour finally wins the six-hour 
day, it will be found that it will involve a double 
shift in most industries, the first shift working 
uninterruptedly from 7 a.m. to 1 p.m. and the 
second shift taking on the work at the latter hour 



170 WAKE UP, CANADA! 

until 7 p.m. A single management could handle 
an industry organized on such a basis, but until we 
have a sufficient number of skilled men available 
to provide a double shift for most Canadian indus- 
tries it is obviously premature to discuss seriously 
the six-hour day. On the basis indicated, most 
industries could possibly run very economically 
and efficiently and with a minimum of overhead 
expense in proportion to output, and thus pay an 
increased wage per hour. 

12. 

I do not wish to write platitudes. But I find it 
hard to refrain from having a tilt at the venerable 
fake notion, which seems to pervade all classes, 
that labour is a necessary evil, an unpleasant duty, 
and happy is he who neither works nor spins. Lis- 
ten to this: ". . . Labour is at once a burden, a 
chastisement, an honour and a pleasure. . . . 
What were man, what were life, what were civil- 
ization, without labour? All that is great in man 
comes of labour — greatness in art, in literature, in 
science. Knowledge — 'The wing wherewith we 
fly to heaven' — is only acquired through labour. 
Genius is but a capability of labouring intensely: 
it is the power of making great and sustained 
efforts. Labour may be a chastisement, but it is 
indeed a glorious one. It is worship, duty, praise, 
and immortality — for those who labour with the 
highest aims and for the purest purposes. . . ." 

I worked hard all my life long, until, after a 



THE LABOURER AND HIS HIRE 171 

severe illness, I decided to retire from active effort, 
which I did for nearly two years. This period 
proved the most drab, uninteresting and altogether 
undesirable in my career. I had plenty of re- 
sources within myself. I was fond of reading, 
gardening, etc., and my days were fully occupied. 
But I could never get away from the idea that I 
was on the shelf — that my work was done. The 
absence of serious responsibility and of the whole- 
some influence of the regularity and self-discipline 
incidental to active business, reduced my life to the 
level of that of a mere animal. I would not repeat 
the experience under any consideration, so long as 
I am able to do a day's work. 

A good friend of mine once said, in a discussion 
on what constituted happiness and satisfaction in 
life, that his conception of that illusive state was 
"a congenial and useful job well done." I feel, 
that this represents the absolute truth. It does not 
matter a bit whether the particular job is the mak- 
ing of a pair of boots, writing a book, or winning 
an important case before the highest court in the 
land. The principle is precisely the same. Most 
of this talk about shorter hours and more holidays 
is founded on absolutely wrong premises. The 
inference is, that any sort of useful occupation is a 
necessary evil and that happiness only lies in idle- 
ness, which is absolutely contrary to human experi- 
ence. Our wage earners are imbibing this poison- 
ous vapouring from professional agitators all over 
the country. 



172 WAKE UP, CANADA! 

13. 

The subject of factory control by labour is re- 
ceiving much attention in Great Britain, where 
constructive thinking is the order of the day, just 
now. The State was forced into manufacturing 
during the war and owns many splendid plants. 
Sir Eric Geddes now proposes to turn over certain 
aviation plants to be operated by the workers on a 
co-operative basis and under a limited control by 
the State as owner. 

Mr. H. G. Wells, as chairman of a committee 
appointed by the British Government to consider 
questions of labour in the aviation industry, re- 
cently made a minority report to the Committee on 
Civil Aerial Transport, embodying this suggestion. 
He recommended joint control of aircraft factories 
and aerial transport by the State and the workers. 
He also emphasized the value of this new industry 
in affording employment for disabled sailors and 
soldiers. 

It is possible that a national aircraft factory at 
Waddon, where thousands of workers have been 
employed in the manufacture of powerful new aero- 
planes, suitable for commercial purposes, may be 
selected as one of the factories where the experi- 
ment in democratized industry will be carried out. 
The following is an outline of a plan elaborated by 
the "shop stewards" at Waddon, for the working- 
out of the proposal : — 

1. — The factories are to be controlled on the business 
side by a committee representing jointly and equally the 
State as owner, and the workers as producers. 



THE LABOURER AND HIS HIRE 173 

2. — On the productive side the work should be con- 
trolled by a body representing the men and women in each 
department. 

3. — Under the committee should be the departmental 
heads constitutionally chosen by this committee, due 
regard being paid to their qualifications. 

4. — Trade union rates and standards should be regarded 
as the minimum, and nothing should be done to weaken 
the conditions already obtained by organized labour. 

This is all refreshing evidence of new ground 
being broken. 

14. 

The question of wage disputes reduces itself 
merely to one of administration of plain justice as 
between man and man. The problem does not look 
formidable, stripped of all extraneous matter. The 
most complicated disputes, frequently involving 
precisely the same principles, are settled daily by 
our courts of justice. Before the war, the world 
could not agree to settle international disputes as 
private individuals were compelled to settle their 
quarrels. But the war has made international 
arbitration not alone possible, but absolutely com- 
pulsory. It will ultimately have the same effect in 
regard to the lesser questions. The world is 
sated with war. We will have none of it, whe- 
ther it be war within or without our national boun- 
daries. Twelve million lives have been extin- 
guished to vindicate the theory that "might is not 
right." The subject is not even open for discussion. 

The most damnable indictment lies against 
Canadian labour leaders. Having recognized the 
problem, they have been satisfied with a policy of 



174 WAKE UP, CANADA! 

opportunism. Our public men have still less cause 
to be proud. Successive Ministers of Labour have 
timidly played with the problem of capital v. 
labour. Capital itself has pursued a stupid course. 
It would be difficult to point to any great political 
or economic problem that has been made the vic- 
tim of more arbitrary methods, studied negligence 
and lack of vision, than this. We now have the 
problem before us in acute form. It cannot be 
side-stepped any longer. Syndicalism and sym- 
pathy-strikes give the long-suffering public merely 
the choice between compliance or anarchy. It 
seems to be a case of whether one side or the other 
has the bigger club, which is a thoroughly German 
method of settling grievances or attaining ambi- 
tions. All parties to the perpetual dispute have 
cheerfully followed the old, beaten track, appar- 
ently quite convinced that no other and better way 
was open. This spectacle is not encouraging. 
Capitalist, labour leader, statesman — each has 
seemed more utterly helpless than the other in 
grasping the situation. The consumer looks on, 
wondering what is going to happen next. Are we 
to conclude that those representing labour, those 
representing capital and management, and the 
Government, representing the consumer, are ab- 
solute imbeciles, or that no just and reasonable 
basis exists for the settlement of labour disputes? 

IS. 

Labour has always been most insistent upon its 
"right to strike." The only time this attitude was 



THE LABOURER AND HIS HIRE 175 

formally challenged in Canada was by an order- 
in-council under the War Measures Act which 
made arbitration compulsory in industrial disputes. 
Violent labour disturbances followed at various 
points in Canada, also threats of sympathy-strikes, 
and the Government at Ottawa, after the opportune 
signing of the armistice, discreetly repealed the 
objectionable measure. 

Under democratic government, such as we have 
in Canada, and such as they have in the United 
States, where most international labour union 
organizations maintain their headquarters, a posi- 
tion of extreme danger is necessarily created, when 
any class of the community, be the members thereof 
mechanics, labourers, farmers or bankers, can hold 
a loaded gun at the head of the government and 
the people, at a critical time in the history of the 
country, and enforce any and all demands, be they 
just or unjust, simply by the threat to demoralize 
business, backed up by an enormous political 
power. Democratic government becomes a farce 
under such conditions. 

The right to strike under any circumstances, also 
confers the right to deprive citizens of transporta- 
tion, fuel, bread and all the necessities of life : the 
right to let criminals loose on society, and to de- 
prive the community of fire protection. Society 
has, as a matter of fact, during recent years been 
deprived of all these things from time to time in 
different parts of the world through strikes. De- 
cidedly, this right cannot be conceded in a reorgan- 
ized, civilized community. Some better way must 
be discovered. 



176 WAKE UP, CANADA ! 

The labour union movement has served its main 
purposes in securing better pay and shorter hours 
for employees in certain branches of industrial 
production. To bring about these excellent re- 
forms, the unions organized for fighting purposes. 
It would be a grave error to condemn unstintingly 
a fighting organization. The unpleasant fact 
remains, that few worth-while social readjustments 
have ever been attained solely through moral sua- 
sion. Self-interest lies at the bottom of all human 
endeavour, and privilege dies hard. We concede 
the point and make the sacrifice more often because 
we have to, than because we want to, and the "big 
stick" is generally the only conclusive argument. 
This situation reflects little credit on our state of 
society, but history is replete with instances that 
demonstrate the truth of the assertion. Labour 
assuredly would never have reached its present 
status without militant methods. They cannot, 
therefore be unreservedly condemned. It was a 
case of the end justifying the means. But with the 
end of this world war the days of the fighting 
organization should become a thing of the past; it 
won't fit in with the New Spirit. 

16. 

Canada, with her pitiful eight and a half million 
inhabitants and with her large liability for pen- 
sions, public debt, etc., and vast expenditure for the 
ordinary services of Government, to some extent 
necessitated by the enormous area of country to be 
administered and served, is to-day precisely in the 



THE LABOURER AND HIS HIRE 177 

same position as a highly capitalized industrial 
establishment with commodious buildings, modern 
machinery and equipment, as well as organization 
and markets available for a large annual output 
and, naturally, burdened with all the overhead 
expenses incidental to such a manufacturing equip- 
ment and capacity, but with two-thirds of the plant 
standing idle owing to lack of labour. The prob- 
lem confronting this imaginary enterprise and the 
present financial problem of the Dominion of 
Canada appear to be absolutely identical. It is 
contained in two main propositions: first, so to 
utilize the present available forces as to obtain 
maximum efficiency and the greatest possible out- 
put; secondly, to obtain at the earliest moment a 
sufficient number of additional hands to run the 
plant to capacity. 

Our greatest national problem is doubtless to find 
the hands to work our agricultural lands, our 
mines, our fisheries and our forest resources, to 
capacity or as near capacity as we can. Granting 
the available resources and the available man- 
power, additional working capital will naturally 
follow as fast as required. If capital gets fair pro- 
tection and profitable employment in Canada, we 
need concern ourselves little about this phase of 
our development. The world is now full of capital 
looking for safe and profitable investment, as far 
from Bolshevik activities as possible. 

To utilize our present forces to capacity, how- 
ever, is the immediate and most important problem 
facing us in Canada to-day. As I am writing this, 



178 WAKE UP, CANADA! 

the press carries a despatch from the Pacific Coast 
to the effect that labour there is asking for a six- 
hour day and a five-day week. I do not blame 
labour for making unreasonable demands. It is 
simply a case of lack of information; merely an- 
other manifestation of the absurdity of our present 
system of autocratic management of industry. 
Capital ridicules ideas of this sort, but takes no 
constructive steps to see that labour is properly 
informed. Labour interprets such an attitude as 
mere unwillingness to "disgorge." Mutual distrust 
is the final result, where identity of interest would 
suggest sympathetic co-operation. Quite obviously, 
there was never a more unfortunate period in 
which to attempt to reduce the standard working 
hours than the present. 

The educational effect of war operations on in- 
dustrial production the world over will not soon be 
forgotten. The eyes of the nations were opened to 
the possibilities of speeding up, under most adverse 
labour conditions. Women were mobilized for 
work that would have been regarded as entirely 
beyond them years ago and they did well. At 
this moment, the world must of necessity be far 
behind with the supply of products and manufac- 
tured articles normally required. Our energies 
have for years been almost exclusively focussed 
upon supplying war materials. Such activities are 
now, we hope, a thing of the past. The individual 
to-day is in a reasonably prosperous condition due 
to higher wages and enforced economical living. 
He is doubtless able to purchase as freely as ever 



THE LABOURER AND HIS HIRE 179 

he was, and he will. Half of Europe is bootless 
and lacks almost every article that has hitherto 
been considered indispensable. Canada and the 
United States have also been living on short rations 
and will require to replenish. Our railways are out 
at elbow, our ships have been destroyed, our pro- 
ductive machinery requires overhauling. Every- 
thing, in fact, indicates, that there will be no lack 
of orders or employment as soon as we get safely 
over the present transition period. Raw materials 
also will presently be available in normal volume. 
When that time comes, we shall need to speed up 
as effectively as we did during the war, and now 
is the time to perfect our plans. We cannot afford, 
for reasons of national interest, to lag behind in 
profitable production. Our motto should be to put 
our men to do men's work. The towns and cities 
of this huge, undeveloped country, which is crying 
to heaven for more, and yet more, man-power, to 
develop our natural resources, are crowded with 
strong men measuring calico by the yard, and 
filling ice-cream cones, while our women milk cows 
and often perform the harder tasks on the farm and 
in the factory. During the war the slacker was 
asked why he was not in khaki. The able-bodied 
industrial slacker might now appropriately be 
asked : "Why are you not in overalls?" Employers 
might advantageously follow the good, sound war 
practice of turning adrift strong, single men who 
occupy situations that could be satisfactorily filled 
by women, physically-disabled soldiers or married 



180 WAKE UP, CANADA ! 

men. There will soon be man-sized jobs waiting 
elsewhere for the able-bodied worker. 

The question of man-power must always be par- 
amount in a new, undeveloped country and Canada 
is no exception. It is perhaps the supreme problem 
to-day. Labour in Canada has, naturally, always 
been antagonistic to immigration. Public policies 
on the subject consequently, have had to be framed 
with a cautious eye to labour's general attitude. 
There is just now a strong tendency to erect unrea- 
sonable barriers against the inflow of population. 
While it is sound policy to close our gates to unde- 
sirables, we frankly cannot afford to be too par- 
ticular. "Canada for Canadians" is a beautiful 
sentiment, but Eastern Canada, with its dwindling 
birth rate, cannot furnish population for coloniz- 
ing its own idle lands, leave alone the enormous 
areas of the West. Canada must perforce increase 
her population so as to reduce the per capita public 
liability and we must secure assistance to develop 
our country and increase production to pay our 
debts. This seems the most elementary sort of pro- 
position. There is no philanthropy about it. It is 
plain, unadulterated business. 

There is another feature of immigration that 
organized labour must not overlook. Colonization 
via the "homestead route" is not at all a pleasant 
occupation — not nearly as pleasant as urban em- 
ployment with a six-hour day and a minimum 
wage. Yet, this tiresome frontier job of work must 
be done by someone, if urban labour is to continue 



THE LABOURER AND HIS HIRE 181 

drawing even its minimum wage and not be re- 
duced to the point where even six hours' work a 
day is unobtainable. This pioneer is the man who, 
in the last analysis, pays part of the wages. Skilled 
labour has not in the past manifested any alarming 
tendency to take up frontier homesteads. The fact 
is, that the development of our "hinterland" would 
cease almost as soon as we put the bars up against 
alien immigration. That is about the only class 
that will be bothered with our present homesteads 
consisting mainly of cull lands, remote from trans- 
portation. 

But perhaps we need not get unduly excited 
about the matter. The chances are that continental 
Europe will put up the bars at home and do it most 
effectively. Even in pre-war days, European coun- 
tries hated emigration and prohibited all propa- 
ganda calculated to lure their people to other coun- 
tries. In the face of the enormous State liabilities, 
reduced man-power and reconstruction require- 
ments of Europe, it would be folly to anticipate 
any large movement of people from there to 
Canada. We shall have to pin our faith to the 
United States with whatever help Great Britain 
can give us. And organized labour must be good 
and refrain from embarrassing our colonization 
authorities. They will deserve help and not hind- 
rance. 



182 WAKE UP, CANADA! 

17. 

We find in the bewildering paradox of life, that 
evil influences are frequently productive of benefi- 
cial ends. The course of our social evolution is 
punctuated with horrors, and mankind has in all 
ages waded through rivers of blood to reach the 
shore of the land of promise. The world has just 
emerged from another blood bath, the most appal- 
ling of all. The crucifixion of mankind was en- 
dured with stoicism because great principles were 
at stake, principles great enough to justify millions 
upon millions of the world's lusty youths risking 
the great sacrifice and ready to pay it willingly. 
Some degenerate minds saw in this world-eruption 
merely the hands of the "capitalist." Those with 
a clearer perception of things, saw the world in 
arms to vindicate the right of the common man to 
liberty and freedom of action. This was gained at 
the cost of life and treasure, willingly sacrificed 
by all classes, in volume unprecedented in history. 

The world is exhausted by the effort and the time 
is ripe for the unscrupulous demagogue to take ad- 
vantage of the situation. Countries now at peace 
with other nations are seething with poisonous pro- 
paganda within, directed by those who stayed at 
home and profited by the nation's distress. Labour 
is restless and impatient and easily influenced. 
Strikes are the order of the day. Labour feels its 
power. Organizations no longer respect contracts, 
nor are they amenable to discipline. Society can- 
not resist organized anarchy on the part of a large 



THE LABOURER AND HIS HIRE 183 

class of the population. Whatever labour demands 
must perforce be conceded even until industry col- 
lapses. That is clear. No law can be enforced 
that would change this situation. Labour has a 
monopoly, and the very best that society can hope 
for is moderation of demands. The farmers, by 
acting together militantly, could starve Canada, in- 
cluding the labouring man, into paying any price 
for food they chose to dictate. There is no par- 
ticular trick about that. Any jackass, wielding a 
bludgeon and flourishing a shooting iron, can take 
the purse from an unarmed man or woman. But 
we all thought that the new world was to function 
on the principle of the "square deal" — justice to 
all. 

18. 

I say to the labouring man, in all seriousness: 
"Don't rock the boat." The industrial situation in 
Canada is in the flux. Many industries are face to 
face with far-reaching changes in production; in 
many cases complete mechanical re-organization. 
Owing to labour unrest, those who could go full 
steam ahead, hesitate to enter into contracts, not 
knowing what wage demands may at any time be 
made upon them. The whole international indus- 
trial system is in process of re-organization. No 
manufacturer knows what to-morrow may bring 
forth. It is a period for caution. Seriously, is this 
the opportune time to enforce your demands — to 
declare war? Because, that is what it means. You 
have gained much in recent years and you will 



184 WAKE UP, CANADA! 

gain more, but give your country a chance to take 
breath and settle down after the recent exertion. 
You can afford to wait awhile until industry finds 
its bearings and can discuss the future with you 
intelligently. Be patriotic! 

There is also a word of warning due to the 
crack-brained anarchist. ... I am not going 
to insult the decent, self-respecting worker by class- 
ing him with you, so far, an infinitesimally small, 
if blatant, quantity in Canada. Our environment 
is uncongenial to you. Your very profession of 
faith renders you impervious to argument. You 
would fail to understand. You are generally the 
product of the slums of European cities — the issue 
of feeble-minded parents. That is your misfortune 
and, to some extent, your justification. Your sort 
is having its fling in Russia to-day, murdering, pil- 
laging and destroying. This present terror may 
wipe off the face of the earth cities, towns, arts and 
industries of that unfortunate country. But any 
of these vandals who escape death by violence or 
well-merited starvation will live to realize, that 
the Soul of Russia — in the safe custody of the "man 
on the land" — can never be destroyed. It cannot 
even be polluted for long by contact with this de- 
generate scum of humanity — the worthy offspring 
of that frenzied, body and mind destroying, indus- 
trialism which the modern world falls down and 
worships abjectly as the greatest of national 
achievements. The real Russia goes on her way 
imperturbably. In her primitive strength she will 
live and prosper even without cities and towns and 



THE LABOURER AND HIS HIRE 185 

industry and capital and labour. Canada is pre- 
cisely the same kind of country, but with this im- 
portant difference, that we have an enlightened and 
aggressive agricultural population here which out- 
numbers all other classes combined. Take that 
lesson to heart. 

Upon the employer I would urge, as his patriotic 
duty at this time, an immediate and careful in- 
vestigation into any grievances of his employees. 
Get together! Anticipate the claims of labour. The 
wages you pay, and conditions of employment, 
must compare favourably with those prevailing 
elsewhere. If they do not, and you cannot now cor- 
rect them and live — and there are many cases of 
this sort — call your employees together and take 
them into your confidence. Then you have done 
your full duty. The day of splendid isolation on 
the part of the employer is gone. The new day is 
dawning. 

It must be at once conceded, that the democratic 
State can, through legislation or coercive measures, 
contribute comparatively little towards the im- 
provement of industrial relations. Its functions in 
this direction must be confined to investigation and 
the formulation of effective plans to bring the con- 
tending parties together on a workable basis, thus 
leading the way towards a lasting entente cordiale. 
The obvious course for the Federal Government 
to pursue would seem to be, to adapt forthwith the 
Whitley plan to Canada's requirements by creating 
territorial divisions of uniform labour conditions 
in each trade, and then energetically to assist in 



186 WAKE UP, CANADA! 

organizing each industry as therein contemplated. 
Everything points to the soundness of the prin- 
ciple, that conditions vary so enormously in each 
different line of industry, that they must be auto- 
nomous absolutely. It is the plain duty of the 
Government to take the first step in the complete 
industrial organization of the country. 

It is encouraging to note, that a commission on 
industrial relations is at work in Canada. It is 
devoutly to be hoped, that its deliberations will 
not be unduly prolonged. 

The British Government recognized the gravity 
of their industrial crisis by placing a very brief 
time limit on the work of Mr. Whitley's commit- 
tee. It was measured in hours and days. Let us 
"wake up" in Canada, too. We cannot afford to 
devote weeks and months of precious time to 
cogitation, reflection and hair-splitting. It is a 
real, man-sized problem. The country is weary of 
timid vacillation and is ready to support heroic, 
constructive effort towards ending the existing 
demoralizing labour unrest. Give us action! 



CHAPTER EIGHT 

THE SINGLE TAX CONTROVERSY 
1. 

THIS volume would be incomplete without 
some reference to the single tax system. A very 
extended and detailed consideration of the matter 
is not possible here, but a general survey of the 
proposal may be useful. The sentiment in favour 
of the adoption of single taxation is undoubtedly 
growing throughout Canada. The organized farm- 
ers have definitely incorporated the policy in their 
platform and the system numbers amongst its 
adherents many able and influential men. The 
issue is distinctly and emphatically before the pub- 
lic in this country and it, therefore, merits the most 
serious consideration. 

I have for years honestly attempted to master, at 
least, the fundamentals of the system and have dili- 
gently read a great deal of the extensive literature 
available. Single taxation is very evidently less 
of an economic than a social system. It is heralded 
as the only comprehensive, all embracing, and just 
scheme of taxation. It is also claimed that its 
adoption would be followed by the elimination of 
poverty through the more equal distribution of 
wealth. 

The scheme, broadly speaking, is to collect taxes 
on the site or rental value of land only, and not on 

(187) 



188 WAKE UP, CANADA! 

improvements, to impose special taxation on un- 
earned increment in land and to abolish all other 
forms of taxation including import duties. As 
a taxation proposal, pure and simple, it has un- 
doubted merits. But the point, of course, is, that 
the land tax would be so large, that it would prac- 
tically absorb almost entirely its annual rental 
value. In other words, it would appear to be prac- 
tically equivalent to confiscation of all land for the 
public benefit. The issue is almost wholly one of 
degree and the extraordinary feature about the 
case is, that one is never able to pin the single taxer 
down to anything concrete on that subject. Statis- 
tical information is readily available, on which cal- 
culations could be based, forecasting in detail al- 
most the exact financial operation of such a plan, 
if consistently carried out, but such calculations 
are conspicuous by their absence. The high 
priests of single tax ask the public to take almost 
everything on trust. This attitude is unfair. 

Opinions will be divided as to the morality of 
the wholesale confiscation of land. Why a citizen 
who, for the time being, has his savings invested in 
land, should have it confiscated, or even partly con- 
fiscated, while another, who left his money in the 
bank or put it into railway shares, remains in un- 
disturbed possession of his property, is difficult to 
see. The single tax advocate hastens to explain, 
that the ownership of land is immoral and that, 
therefore, no wrong is done by the State in taking 
its own. But that fine-spun theory does not elimin- 
ate the hardship to the absolutely innocent individ- 



THE SINGLE TAX CONTROVERSY 189 

ual who happens to be a land owner for the time 
being. 

The literature on the subject is generally most 
obscure and disappointing. We are told, that with 
the whole burden of taxation against the land, rents 
would not increase. Authority after authority 
(mostly obsolete) is quoted on that point. To the 
ordinary mind, the first and obvious effect of an 
increase in taxation of land, would be a correspond- 
ing increase in rents, and the burden would be 
automatically transferred. That happens now 
every day in our larger cities, and also in connec- 
tion with farm tenancy. The tax is simply part of 
the overhead cost of administering real property 
and is recovered in the rental charge. 

Then we are treated to long disquisitions on what 
controls wages — page after page of ponderous, 
abstruse arguments, interspersed with quotations 
and refutations. This war has pretty well shot to 
pieces all the theories of the older generation of 
political economists. They may have meant some- 
thing in California in 1875, when Henry George 
propounded his new social system. They mean 
absolutely nothing in the Dominion of Canada in 
the year of our Lord 1919. Every one knows, that, 
with the possible exception of periods of wide- 
spread depression, labour unions control the wages 
of organized trades, and unorganized labour is 
generally paid in proportion. This is perhaps a 
superficial view, but it is practical. Why make 
mysteries of these things? They are plain as day- 
light and put aside all the beautiful economic 
theories completely. 



190 WAKE UP, CANADA ! 

The truth seems to be that Henry George was a 
dreamer and an enthusiast and his latter day adher- 
ents are inclined to follow the same lead. One is 
surfeited with glittering generalities, while the 
honest investigator is hungering and thirsting for 
concrete facts. In this respect, the single tax agita- 
tion very much resembles the socialist movement, 
which has been so completely discredited by the 
events of the recent war. 

2. 

In spite of the fact that the single tax theory has 
been urged, in season and out of season, for more 
than a generation, no country has as yet adopted it 
completely. In fact, Canada, particularly the 
West, has perhaps gone farther in this direction 
than any other country and sometimes with un- 
happy results. These, we are told, are due to the 
fact that the system has not been applied in its 
entirety. Land, as a basis for taxation, is in itself 
an attractive proposition. It is visible and cannot 
be made away with. Its ownership and value may 
easily be ascertained. It can unquestionably be 
made the basis of a just taxation system. But not 
necessarily to the exclusion of all other sources of 
internal revenue. 

The single taxer reserves for the State the greater 
part of the unearned increment on land. If you 
buy an acre of land for $10.00 and then sell it for 
$25.00, the State steps in and takes all or part of the 
profits. That idea has much to recommend it, but 
supposing it is bought for $25.00 and then fore- 



THE SINGLE TAX CONTROVERSY 191 

closed on a basis of $10? That makes an awkward 
situation, and there are cases of that sort every day. 

We are perhaps expecting a little too much of 
human nature when we want a farm owner, for 
instance, to become wildly enthusiastic over it. He, 
let us suppose, was one of the early pioneers and 
obtained his land for nothing. He has now, by the 
sweat of his brow and by all sorts of hardship and 
self-denial, transformed his half-section of bleak 
prairie into a real home with waving grain 'fields, 
and flowers growing all around the comfortable 
homestead. Perhaps he wants to retire. He may be 
getting on in years or lacking in health and have 
no family. His land is his chief asset. He wants 
to sell at the best possible figure. Why should he 
be deprived of the fruits of his labour through the 
operation of a confiscating increment tax? God 
knows, that he deserves every cent he will ever get 
out of that farm. I have pioneered myself in two 
provinces and my sympathy goes out to that man. 
We can't ever do enough for him. He has done 
more for the public than the public will ever, or 
can ever, do for him. What right has the single 
taxer to maintain, that the increased value of this 
land is entirely due to the community which, as a 
matter of fact, played a comparatively small part 
in its enhanced value? It is sheer exaggeration. 

But, notwithstanding all this, there is much to be 
said for the principle of the part confiscation of un- 
earned increment in land values, for the benefit of 
the public. It has, at least, certain solid and sub- 
stantial arguments behind it, and one thoroughly 



192 WAKE UP, CANADA ! 

comprehends just what it means. But then, we 
already have that principle embodied in legisla- 
tion in a somewhat mild form in the western prov- 
inces of Canada. 



The very first element in taxation must neces- 
sarily be the ability of the State to collect. On 
imports we collect taxes in advance. As to tax on 
income, the citizen and all he owns is liable. On 
a land tax, the land only is the security. Govern- 
ments cannot carry on the public services and pay 
for them in town lots. They must have real money. 
Here is the first difficulty. Urban land values all 
over Canada, and particularly in Western Canada, 
are largely fictitious just now, and probably will 
be for many years to come. A single tax, as heavy 
as such a tax would necessarily be, would not lend 
itself very readily to raising revenue out of non- 
productive town lots. 

Let us take a case in point and see how it would 
work out. The Town of Chilliwack in British 
Columbia has a population of 1,600 souls. It 
covers an area of 1,040 acres. It could comfortably 
take care of its population on 160 acres. That 
would give about half an acre to each family. We 
may, therefore, take it for granted that about 880 
acres is held speculatively — not necessarily by 
people who have bought property at a song, and 
now, with consummate greed, stand by to see Chil- 
liwack grow into a city by the efforts of others, 
when they will calmly sell and depart with their 



THE SINGLE TAX CONTROVERSY 193 

ill-gotten gains. More likely the unfortunate 
owners of this property have paid ridiculous prices 
for it and would be glad to sell at any time for a 
mere fraction of what the investment had cost them 
originally. Most of these speculative owners have 
probably by this time abandoned their property 
rather than continue paying the heavy municipal 
taxes. 

However, under a consistent single tax plan, the 
problem would face the Minister of Finance to 
collect from the Town of Chilliwack the sum of. 
at least, $143,000, made up as follows: 

(1) Dominion Tax based on total estimated 
Federal expenditure of 300 millions, being at 
the rate of $37.50 per head of population 

in Canada. Chilliwack has 1,600 inhabitants. $60,000.00 

(2) In lieu of Provincial Income Tax now 

levied, not less than 6,000.00 

(3) In lieu of Municipal Tax now levied, 
approximately 77,000.00 



$143,000.00 



The total land assessment of Chilliwack is 
$975,000, of which doubtless not fifty per cent, 
could be realized at any price, having in view the 
present tax liability to the municipality. What 
would be the condition of this town under a rate 
of taxation amounting to fifteen per cent, of the 
present high assessed value of all land? The State 
would soon own it all. 

It may be argued that the example cited is not an 
average one. Possibly, but it is not by any means 
an isolated one. Hundreds of urban municipal- 

7 



194 WAKE UP, CANADA! 

ities throughout the West, and doubtless many in 
the East, are in the same, or even in a much worse 
position. A taxation system of this sort must 
necessarily be susceptible to general application. If 
it falls down in even one locality it is unworkable. 
We cannot enforce it in the city of Montreal, 
where it might apply, and adopt some other system 
in the smaller towns. 

4. 

It seems evident, that if the single tax system will 
work anywhere, it is in the taxation of agricultural 
lands. But the single tax enthusiast tells us, that 
the intention is to make the urban centres carry the 
main burden and deal gently with the farmer. That 
simply cannot be done. As a policy it would be 
dishonest. We are, therefore, face to face with 
the uncomfortable fact, that the farmer, whose 
main asset is necessarily his land, cannot hope to 
escape heavy taxation, whereas the city man, 
whose assets may be, and frequently are, confined 
to stocks and bonds and other business investments, 
would escape taxation entirely. He may pay in- 
directly, but that supposition is much too theoreti- 
cal for practical discussion. If rents are not to be 
advanced, how would he pay? 

We are told that the proposal is to sweep away 
all other forms of taxation and concentrate the 
levying of taxes, for public revenues of all sorts, 
upon the land. Then it naturally follows that the 
greatest land-owning class in Canada, viz., the 
farmer, must look forward to contributing a 



THE SINGLE TAX CONTROVERSY 195 

greater proportion of taxes than he is doing under 
our present dual system. I say "dual system" 
advisedly, for we now have, in the West, at least, 
practically a system of single tax as far as provin- 
cial and municipal revenues are concerned. Federal 
revenue is, of course, raised by means of import 
duties and income tax and in various other ways. 
The single taxer then advances the argument that 
his system automatically involves a change in our 
fiscal policy — that it means free trade, and that the 
farmer, by virtue of being able to purchase his 
goods in a cheaper market, could well afford to 
pay a higher tax on his land. The real point, 
therefore, seems to be, whether the farmer would 
in the end, contribute more under a tax upon his 
land only, than he now does with a nominal land 
tax, but labouring under the handicap of a "tariff - 
for-revenue" system with its indirect burden. In 
other words, the main question apparently is not 
one of single tax at all, but of fiscal policy. It is a 
pity that the two should be mixed. It beclouds 
public understanding of a very important subject. 
What w r e want is straight and clear thinking: facts 
and not fads. 

One never ceases to wonder what species of 
hypnotic influence the single tax enthusiasts have 
exercised on the farmers to enlist their support. 
The farmer of Canada should be the governor on 
the engine of public opinion and the brake on 
hasty and ill-considered public action. As the 
great land-owner, this becomes his natural role and 
responsibility, as it has in every country on earth 



196 WAKE UP, CANADA ! 

since the dawn of civilization. The apostles of 
single tax should make it abundantly clear on what 
basis they claim the support of the farmer. We 
want less oratory and froth, and more facts and 
figures, which may be easily digested and under- 
stood. 

S. 

Even in its application in urban centres, there are 
some very serious objections to the principle of the 
single land tax, which I shall only touch upon 
lightly. We have spent large sums of money in 
Canada on propaganda work in connection with 
town planning, the object being to bring about 
such reforms in urban administration that our 
towns and cities will become more healthful and 
more beautiful and altogether more desirable as 
places of residence. It is difficult to imagine any 
movement more promising in its scope and effect. 

The very foundation of intelligent town plan- 
ning is to ensure that houses are not jammed up 
one against the other in the residential areas, but 
that each residence has a generous site for garden 
and ornamental purposes. This has been distinctly 
discouraged in our western towns as the direct 
result of the limited municipal single tax system. 
The tax, being based on land value only, it follows, 
that the man who builds on two lots of twenty-five 
feet frontage each, which just gives sufficient room 
for the average small house, will pay only one half 
the taxes his neighbour pays who devotes an addi- 
tional two lots to lawn and garden and is thus a 
public benefactor. 



THE SINGLE TAX CONTROVERSY 197 

Another effect would be the gradual elimination 
of the individual home and the introduction on a 
large scale of apartment and tenement buildings. 
Obviously, with a very heavy tax on the ground, 
the object would be to crowd as many families 
upon a given area of land as possible. This prac- 
tice is now very common, but would be inevitable 
with heavy ground rents or taxes. Surely, we 
could not contemplate such a development with 
equanimity! Our cities would become as con- 
gested as they are in Europe, with lasting injury to 
the health and well-being of our children and our- 
selves. 

It is also clear, that the burden of taxation would 
automatically be reduced upon the principal 
streets of our cities, with their imposing office 
buildings and stores, and would be increased cor- 
respondingly upon inferior business properties, 
which even now cannot stand very many additional 
burdens. This would mean, that the most affluent 
citizens would apparently be relieved of heavy 
taxation, to the detriment of those not so well able 
to contribute. 

The single tax advocates will need to meet these 
objections to their proposal before they can count 
on the unqualified support of a majority of the 
voters. As a general scheme of raising revenue, 
land taxation is very attractive, but those who be- 
lieve in the single tax would be well advised to 
abandon generalities and to focus their attention 
solely upon the concrete problem of applying the 
theory to conditions as they exist in Canada. 



198 WAKE UP, CANADA! 



Before leaving this subject, I want to comment 
briefly on the question of the attitude of the State 
towards the non-resident land owner. This much 
abused individual receives scant sympathy. Every 
possible method is used to make his burden intol- 
erable. Frequently he is not a resident of the com- 
munity wherein he owns land and, therefore, is not 
a political factor. The single taxer frankly desires 
to make his position untenable. While the prob- 
lem of the unoccupied land, title for which has 
passed from the Crown, is to some extent a general 
one, I shall deal more particularly with the West- 
ern situation, which seems to worry many of our 
ardent reformers. 

The Western provinces have now passed legisla- 
tion dealing with the subject. The "Wild Land 
Tax" has a two-fold object in view. First and 
foremost, to raise revenue. Secondly, to promote 
the settlement of unimproved lands. Of course, 
the taxation of unoccupied lands holds out great 
attractions to those who are responsible for raising 
the necessary revenue to defray the expense of our 
provincial public services. The owners, in most 
cases, are not there to raise objections. And, better 
still, they are not even there to vote against the 
Government, which may indulge in sweet dreams 
of the happy state of legislators if all revenue could 
be raised by taxing absentees! 

To the personal knowledge of the writer, a very 
large proportion of the unoccupied land in West- 



THE SINGLE TAX CONTROVERSY 199 

ern Canada, outside Hudson's Bay Co., railway and 
school lands, is not held by speculators, but by men 
who came to Canada, generally from the United 
States, to buy farms with the full intention of set- 
tling on them as soon as they could disentangle 
themselves from their home interests. This some- 
times takes years to do. Why did these men buy 
land in Western Canada before they were able to 
settle on it? Because they had no intention of 
making any move until they knew they could get 
satisfactorily placed elsewhere. Therefore, they 
had to secure land before they even attempted to 
sell out in their old homes, also forestalling any 
prohibitive increases in the price that might after- 
wards take place. This large army of absentee 
land owners is now contemptuously classed as 
''speculators," simply because they exercised 
ordinary business foresight. 

To regard them as enemies of the country seems 
a very far-fetched theory. They are now bearing 
the burden of normal taxes and, in addition, are 
paying the extra "wild land" tax, while the unoc- 
cupied land they own is being put to beneficial use 
by the settlers in the neighbourhood, for grazing 
purposes. Are not these men really benefactors? I 
confess they have my full sympathy. Their lot is 
not an enviable one. We persist in ranting about 
the "settlement of our vacant lands." Let us be 
honest and admit, that the Provinces tax them now 
because they need the money and need it badly. 

There is, of course, the case of the vacant town 
or city lot to be considered. But why waste time 
on elaborating taxation schemes for that class of 



200 WAKE UP, CANADA! 

landed property? No one wants it. The burden of 
municipal taxation is now almost intolerable and 
the title to the greater part of out-lying property of 
that class will doubtless pass, or has already passed, 
to the various municipalities, through the expedi- 
ent of tax sales. Inside vacant lots of greater value 
lie idle because the demand for buildings is not 
there. No sane man would carry an investment 
of that sort in an undeveloped state, in the face of 
a large annual tax bill, if there was the slightest 
possibility of making it revenue producing. As a 
general rule, the unfortunate owner of this class of 
property is quite sufficiently punished by the very 
reason of his ownership, without devising special 
means of inflicting further penalties. 

The whole problem of the settlement of our 
vacant farm lands in the West, is not to be solved 
by any iniquitous system of confiscatory taxation 
such as is clearly in evidence now. It is rather a 
case for promoting general colonization and for 
bringing intending settlers and absentee land-own- 
ers together, so that a sale may be conveniently 
effected. Taxation on a very moderate basis may 
play a certain part, but should not be regarded as 
the sole policy to be considered. These men have 
purchased land in good faith, and probably at high 
prices, and are entitled to be protected against 
predatory legislation, which in the end will do 
vastly more harm than good, by destroying the con- 
fidence of residents of other countries in our integ- 
rity and in our institutions. At any rate, it is at 
least useful to reflect upon the other side of this 
question. 



CHAPTER NINE 

INDUSTRY AND TARIFF 
1. 

THERE can be no possible argument against a 
national policy of encouragement of the indus- 
trial development of Canada, although there may 
be widely divergent opinions as to the precise 
method of doing so. A nation is composed of in- 
dividuals with varied ambitions and preferences 
in the way of occupations. If they cannot find suffi- 
cient scope for their talent at home, they emigrate 
to countries where they can, which is a loss to the 
State. There is, however, as above stated, ample 
room for argument as to the most efficient and fair 
methods of extending encouragement to industry, 
and this is, unquestionably, the greatest conundrum 
that faces Canada today. 

Every country presents peculiar problems of its 
own in this respect. Canada's industrial section is 
now largely confined to Ontario and Quebec. 
These Provinces, unfortunately, are not generously 
endowed with the natural resources that form 
the raw materials of industry. They do not pro- 
duce a single ton of coal. The Nova Scotia coal 
comes up by water only as far as Montreal. 
Ontario, therefore, is absolutely dependent upon 
the United States for every pound of coal con- 
sumed, domestic as well as industrial. To make 

(201) 



202 WAKE UP, CANADA! 

matters worse, we have no great iron deposits avail- 
able in Eastern Canada which can be developed 
profitably. Such a state of affairs would ordinar- 
ily make industrial development very difficult. 
Ontario, however, has succeeded in rendering 
available enormous water power, which to a lim- 
ited extent, equalizes the situation. Out of the total 
Canadian water power of over two million horse 
power, now developed, Ontario has the lion's 
share. The per capita figures for other countries 
show, that next to Sweden and Norway, Canada 
ranks the highest in developed water power accord- 
ing to the population. This is most satisfactory and 
encouraging. 

The concentration of our industrial energies on 
the manufacture of war material and munitions 
during the great war has, however, opened up new 
possibilities for the extension of industries. Cana- 
dian manufacturers, coming into direct competi- 
tion with the world, made a proud record for them- 
selves. They demonstrated their ability to produce 
against all comers, in point of economy as well as 
quality of product. When the full story is told 
we shall find, that our industrial leaders and our 
man-power are second to none in the world. 

Great possibilities are looming up with regard 
to steel production in Canada. We have extensive 
deposits of magnesite in Eastern Canada which 
were developed during the war. Our carbon elec- 
trodes stand in the very first rank and can compete 
successfully with the British in point of cheapness. 
We also have our vast nickel deposits which are 



INDUSTRY AND TARIFF 203 

now developed to a very high standard. Under 
the circumstances, nothing seems to stand in the 
way of Canada branching into the manufacture of 
high quality steels. Our annual steel production 
has been increased from one million tons pre-war 
production to two and a quarter million tons. We 
have a few other raw materials in abundance, not- 
ably pulpwood, which are also leading to increased 
industrial production. 

A recent industrial survey by the Canadian Cen- 
sus Bureau shows healthy progress. The following 
are the figures : — 

1917 1915 

Capital invested $2,772,517,680 $1,994,103,272 

Employees on salaries .... 73,598 52,583 

Salaries paid 95,983,506 60,308,293 

Employees on wages 619,473 462,200 

Wages paid 477,246,456 229,456,210 

Cost of materials 1,602,820,631 802,133,862 

Value of products 3,015,506,869 1,407,137,140 

The gross value of goods made in Canada in 
1917 amounted to $3,015,506,869, and the cost of 
material was $1,602,820,631, leaving a net value 
added by the process of manufacture of $1,412,- 
686,238, or $5,449,098 more than the gross value of 
production in 1915. 

There are special reasons why we should pro- 
mote our export trade. We have enormous interest 
payments facing us abroad. These must be met 
largely by exports. But the basic principle should 
be, that industry should be encouraged only to have 
Canadian labour most profitably employed. We 
certainly cannot afford to employ Canadian labour 



204 WAKE UP, CANADA! 

in making articles that the foreigner can make 
much cheaper than we can. It is waste of time, 
energy and capital. The result of such a condition 
most frequently leads to capital and labour being 
employed in unnatural, artificial industries, when 
these forces could be profitably employed in devel- 
oping industries natural to the country. 

2. 

Soon after Confederation, while Canada was 
young, the Government of the day in its wisdom 
decided to inaugurate a policy of encouragement 
to Canadian industry. The proposal was labelled 
the "National Policy" and became law after a hotly 
contested election. It was designed to protect 
infant industries and, incidentally, produce Fed- 
eral revenue. This was the programme of the Con- 
servative party. The Liberals for years denounced 
as iniquitous any proposal to protect industry. We 
should have free trade, "as they have it in Eng- 
land." In the fulness of time the Liberals became 
the "ins," in Canadian politics. But the tariff 
remained, except for a few spectacular but incon- 
siderable amendments. In fact, with the respon- 
sibilities of office, or perhaps impairment of profit- 
able sources from which to draw the party funds, 
the Liberals experienced a change of heart and a 
"tariff for revenue only" became the party slogan. 
This was calculated to square the consciences of all. 
As above stated, the "protective" tariff of the Con- 
servatives and the "revenue" tariff of the Liberals 
were precisely the same dog under a new name. 



INDUSTRY AND TARIFF 205 

Incidentally, this flagrant violation of specific pre- 
election promises, is perhaps the most disgraceful 
chapter in Canada's political history. This tariff 
policy, with entirely unimportant modifications, 
has remained in effect ever since. 

I entertain grave doubts as to the wisdom of 
developing industry by the indirect means of an 
admittedly unscientific tariff. I question its effi- 
ciency, and particularly its expediency and justice. 
A sound industrial policy would, of course, en- 
courage only such industries as held out reason- 
able expectations of getting on an export basis 
through proper specialization and favourable 
environments. To have protected Canadian indus- 
tries for fifty years at the expense of the public, 
with the only result, that the tariff has had to be 
increased from time to time at the bidding of these 
industries, shows conclusively, that there has been 
no substantial, healthy progress and, that these in- 
dustries are apparently less able to support them- 
selves now than they were SO years ago. To argue 
for one moment, that the people of Canada, east 
or west, will be satisfied with such a policy is futile. 

The present is a most appropriate time to take 
stock. The great war has entirely revolutionized 
the world's industrial situation. Tariff barriers 
were primarily justified on the plea, that any coun- 
try offering its workers decent wages, hours and 
labour conditions, could not fairly be asked to 
compete with other countries paying starvation 
wages, imposing long hours and permitting the 
exploitation of labour without restriction. That 



206 WAKE UP, CANADA! 

was plausible. We are now, however, face to face 
with the international emancipation of workers, 
leading to wages as high and hours as short as the 
most advanced country every conceded to labour. 
Cost of living on the continent of America will be 
as low as in any country in Europe ; perhaps lower. 
The burden of taxation in Europe will be enor- 
mous, comparatively speaking, which will auto- 
matically increase industrial overhead cost there. 
Add to this the admitted superiority of our man- 
power, productive and executive, and the gloom- 
iest pessimist cannot fail to agree, that we should 
in the future be able to compete against all comers. 
The German commercial menace has vanished. 
Japanese labour shows signs of falling in line. 
Canadian industries should now be able to compete 
in the export market on an even basis. All this 
has an important bearing on the fiscal issue. 

3. 

It is difficult to grasp the point of view of those 
who have guided Dominion finances since Con- 
federation. We started with a policy of out-and- 
out protection. Needless to say, we never had pro- 
tection as a consistent fiscal system. We don't 
apparently even realize what the word implies. A 
protective system creates a tariff wall high enough 
to keep foreign products out. With necessary 
modifications, this is the principle involved. 
Hence, it cannot be depended upon for revenue. 
Also, it clearly contemplates a periodical expert 
investigation of protected industries so as to 



INDUSTRY AND TARIFF 207 

promptly reduce, or entirely remove, the measure 
of protection as soon as the infant industry shows 
its ability to live without artificial stimulant or 
upon reduced rations. The whole drift of a true 
protective system is, of course, towards free trade. 
I leave it to the reader to judge to what extent we 
have had "protection" in Canada, as a consistent 
policy! We have been saddled with a corrupt and 
pernicious fiscal system that cannot be defended on 
any grounds of public interest, that rests on no 
sound economic principles, that is simply an ugly 
hybrid, neither fowl nor fish. 

The most pathetic effect of this haphazard sys- 
tem of ours, is the demoralization of many spoon- 
fed Canadian industries. When a concern became 
involved, it was found much easier to make a raid 
on Ottawa for more protection than to examine 
into the management and efficiency of the plant. 
And Ottawa was amateurish. There was no 
searching investigation by any competent body. 
Persistent members of Parliament, who depended 
upon the support of large industrial establish- 
ments, and the ever voracious campaign-fund man- 
ager, could always put up to the Government argu- 
ments much more potent and convincing than those 
of a mere expert Tariff Board, even if such an 
institution had existed, which, of course, it did not. 

I have endeavoured to the best of my ability, to 
view the situation with an open mind. Above all, 
I have carefully guarded against that most fatal of 
all mistakes, namely, applying the experiences of 
other countries to our domestic problems. Noth- 



208 WAKE UP, CANADA! 

ing can be more stupid and fallacious than to point 
to Great Britain, a free trade country, and con- 
clude, that as Great Britain is great, she is great 
because of her fiscal system. Ergo, if Canada 
adopted free trade, she would be great. Perhaps 
Great Britain is great in spite of it! At least, mil- 
lions of people boldly make that assertion. It is 
equally fallacious to point to the United States, 
which as a matter of fact is the most conspicuous 
example of an absolutely self-contained country 
with unhindered interior trade, as the clearest evi- 
dence on the other side of the controversy. One 
would, of course, be further mystified on finding, 
that in 1918 free trade Britain collected $10.25 per 
capita of population in import duties, while our 
high protectionist neighbour to the south only con- 
trived to collect $1.70 per capita from the same 
source and Canada, for the last year I have record 
of, a modest $17.50 per capita. It is all very con- 
fusing and probably only shows, that each country 
has its own problems and must apply its own 
remedies. There is just one fairly safe attitude, 
namely, that Governments, as a rule, can do little 
by negative policies of exclusion as compared with 
positive policies of promotion. My choice would, 
on general principles, be in favour of the latter as 
an economic article of faith. 

We are, however, more immediately concerned 
with the general effect of Canada's avowed tariff 
policy and whether it metes out equal justice to all 
classes and sections of our country. Considered 
purely as a scheme of taxation, does every citizen 



INDUSTRY AND TARIFF 209 

contribute his just and fair share towards the ser- 
vices of the country or is the burden of taxation 
unequally distributed? Considered as a protective 
measure, does it actually give adequate and indis- 
pensable protection to industries only that cannot 
survive without it and are these industries ab- 
solutely essential in the public interest? Also, are 
those industries of equal value to every citizen who 
contributes towards the price for their retention? 
These, apart from the intrinsic merits of various 
fiscal policies, are apparently legitimate subjects 
for discussion. 

4. 

As a revenue collecting and producing system, 
our tariff appears to have little to recommend it, 
beyond the fact, that it successfully fools the tax- 
payer. Politically, that is, of course, a tremendous 
asset. As far as the individual citizen is concerned 
it is an unmitigated nuisance. Any small purchase 
made outside the boundaries of Canada involves a 
visit to a custom house and the filling out of innum- 
erable forms and complying with other red tape 
and perhaps in the end the payment of only a trif- 
ling amount, frequently much less than the cost of 
collecting it. This perhaps is a small objection. As 
to the cost of collection, it can hardly be urged that 
the present tariff is a shining example of efficiency 
and economy. In 1915 we collected in customs 
duties 76 million dollars and spent 3% millions in 
doing it. A direct tax could, of course, have been 
collected at a much smaller cost, once an efficient 
service for the purpose was organized. 



210 WAKE UP, CANADA ! 

Is the burden of taxation equally distributed 
under the present system? It is almost unneces- 
sary to waste time on this phase of the question. It 
must be abundantly clear to the lowest intellect, 
that nothing could be more unfair and erratic than 
the taxation feature of the present tariff. No one 
knows what any individual pays. When this has 
been said, practically everything necessary is said. 
That it is glaringly unjust is, however, self evident. 
The rich bachelor, unless he buys expensive cigars 
or wines, pays comparatively little. The father of 
a large family is necessarily heavily taxed, as his 
family would generally consume more imported 
commodities. 

But the vilest feature of the whole system is, 
that the presence of a protective tariff raises the 
prices of home made commodities, so that a tax is 
automatically levied whether such commodity is 
made at home or imported from abroad. The only 
difference is, that in the case of the domestic pro- 
duct, the tax is paid to the protected industry and 
not to the Government. Who can make head or 
tail of this maze of indirect taxation, partly for the 
benefit of Government and partly for private enter- 
prise? Can it be intelligently considered at all? 
If not, how can it be justified? 

From a standpoint of fair play and equity — and, 
I take it, that those principles must be fundamental 
to any efficient taxation scheme — a system of "tar- 
iff-for-revenue-only," except when confined strictly 
to luxuries and perhaps to a few commodities of 
universal consumption, as it is in Great Britain, is 



INDUSTRY AND TARIFF 211 

apparently about as intelligent and just, as would 
be a policy of levying special taxes on all bald- 
headed men. Even for such a tax, the wily pro- 
tectionist would doubtless find a justification. He 
would probably maintain that the ulterior motive 
was to promote the luxuriant growth of hair on 
shiny Canadian domes! He is far more plausible 
than the dense, stupid "revenue" tariff advocate, 
with his lame and impotent kindergarten argu- 
ments. 

5. 

It is instructive to see just how far Canada's 
hybrid tariff promotes the development of her 
natural resources. As usual, the best evidence is 
the concrete case. For obvious reasons, I shall 
mention no names. 

A certain large coal mine is capitalized at some 
millions of dollars. It has a record of failure 
behind it and has probably never paid a dividend, 
at least, not during recent years. The shareholders 
are sick and tired of the investment. Some time 
ago it was decided to have an expert examination 
made in order to ascertain what was wrong and 
whether it could be corrected. The report was 
to the effect that the machinery and equipment of 
the mine were antiquated and that no relief could 
be hoped for, until modern appliances were avail- 
able so that coal could be brought to the surface at 
a reduced cost per ton. 

This was bad news, as there was very little 
chance of inducing the shareholders to put further 



212 WAKE UP, CANADA! 

capital into a venture which had proved so disap- 
pointing. However, a competent engineer went to 
work and made an estimate of the cost involved. 
It amounted in round figures to somewhat over 
$250,000. A carefully prepared case was then 
made and submitted to certain influential share- 
holders, residing in the United States, in an en- 
deavour to obtain the necessary capital to promote 
more efficient and economical operations in the 
mines. After untold trouble, a tentative agree- 
ment was reached and the company approached the 
customs authorities to ascertain what tax Canada 
was going to impose on the new equipment re- 
quired. My impression is that it exceeded $30,000. 
The facts were communicated to the shareholders 
interested, with the result that they refused to con- 
tinue negotiations. The mine today is still run- 
ning on the old, extravagant basis, with obsolete 
and insufficient machinery and equipment. This 
is how we promote industry and the development 
of our resources in Canada by means of a protective 
tariff. 

On every side industry is penalized by prohibit- 
ive duties on the very machinery and implements 
that form the basis of its existence. Whether these 
duties are levied for "revenue" or not, is immater- 
ial. That the practice is inconsistent and ruinous 
should be clear to any mind which has grasped the 
first principles of political economy. 

Furthermore, what is the raw material in one 
industry is the finished article in another. Thus we 
find most protected industries paying import duties 



INDUSTRY AND TARIFF 213 

on their raw materials as well as upon machinery. 
In some cases, the amounts so paid very nearly 
absorb the total amount of any protection afforded. 
We have nursed into life a complicated system, 
which defies comprehension. Experts only can tell 
the net amount of protection an industry receives. 
I know one industry that receives nominal protec- 
tion amounting to 35% while its net protective 
margin is less than 10%. What we give with one 
hand, we take away with the other. 



Precisely what are we trying to accomplish 
through our present protective tariff policy? Was 
it the expectation of the authors of this legislation, 
that half a century after its passage the tariff would 
be higher than ever? Is it the intention that, for 
all time to come, a privileged class is to be licensed 
to collect from Canadian consumers up to 45% of 
the cost elsewhere of articles of every day use, thus 
keeping the cost of living in Canada permanently 
on an artificially high level? If so, what is the 
ultimate goal to which such an extraordinary pol- 
icy is intended to lead us? If not, what is the time 
limit, if there is a time or any other limit, and what 
are we waiting for in the case of some notorious 
cases of looting the public under the shadow of our 
protective tariff? These seem very simple ques- 
tions that honest advocates of this system might 
fairly be asked to answer categorically. It is 
scarcely to be supposed that our policy is merely to 
drift aimlessly on the fiscal sea. There surely must 
be an objective of some sort. If we could once 



214 WAKE UP, CANADA! 

ascertain what this objective is, we should be in a 
much better position to intelligently determine 
whether or not the price we are now paying for 
industrial development is worth while. 

We are told that our industries would be swept 
out of existence over night if the present tariff 
barrier were removed, as they could not compete 
with those of the United States and Great Britain. 
It is asserted that if we had a population as great 
as the former country to cater for, all would be 
well. We could then specialize as they do there 
and manufacture at lower costs. That argument 
looks very reasonable and plausible to those who 
properly appreciate the tremendous bearing which 
output has on cost of production and wide markets 
on economical specialization. 

Let us, however, see how it has actually worked 
out in Canada under the blighting influence of a 
tariff created trade monopoly. Our boot and shoe 
industry is one of the greatest in Canada. It has 
powerful capital and large organization behind it. 
We have for many years enjoyed absolute free 
access for boots and shoes to the market of the 
United States. There is, and has been, nothing 
whatever to prevent Canadian industry organiz- 
ing to compete in that market with that of Mas- 
sachusetts. Yet, the Canadian boot and shoe 
industry now comes forward and tells us that 
it has been unable to expand and that it is barely 
making a living and that, if the present enormous 
duties upon imports of boots and shoes into this 
country are removed, the industry will quickly die. 
We find then, that apparently a wide market does 



INDUSTRY AND TARIFF 215 

not lead to success in this industry. When we 
endeavour to ascertain the nature of the obstacles 
in the way, we are vaguely and apologetically in- 
formed, that Boston is the great leather centre, 
that large capital is available there for industrial 
expansion, that the highest trade and executive skill 
is at the command of industry in the New Eng- 
land States, that, as a matter of fact, it is quite hope- 
less to enter the field in competition with an indus- 
try so favourably located and strongly entrenched. 
The inference apparently is, that we must wait 
until we have a hundred million people in Canada, 
when we can create our own Boston and our own 
leather centre. But by that time, they will prob- 
ably have five hundred million people in the 
United States and a Boston trade centre ten times 
as powerful and well organized as it is now. We 
find then., that as far as this particular industry is 
concerned we have just been living in a fool's para- 
dise. We have for half a century, stupidly and 
stolidly, taxed every man, woman and child in 
Canada a dollar or two upon every pair of boots 
they have purchased, in the vain hope of building 
up a great industry in Canada, which it is now 
clearly shown could not be done. Our boot and 
shoe trade, candidly admitting the complete and 
ghastly failure of fifty years of protection to assist 
it to attain a self supporting basis, now calmly pro- 
poses, that this industry shall, presumably for all 
time to come, be placed in the position of a pen- 
sioner upon the Canadian people! Will any 
responsible political leader become a party to such 
arrangement? 



216 WAKE UP, CANADA! 

Strong pressure is being brought to bear by 
Canadian farmers in favour of the free admission 
of agricultural implements. To counteract this 
propaganda, an organization, acting in behalf of 
Canadian farm implement manufacturers, recently 
published elaborate statistics to show that a certain 
standard self-binder, manufactured in Canada, is 
actually sold at a lower price in the Canadian West 
than a similar implement, made in the United 
States, can be purchased for at corresponding 
points in the westerly part of that country. Some 
of the prices quoted are, by the way, not quite con- 
vincing. To clearly prove that the Canadian pro- 
duct is, as a matter of fact, superior to the Ameri- 
can, it is gravely asserted, that in the foreign mar- 
ket, where they compete on an even basis, dealers 
will readily pay a premium for the Canadian 
article. This is most reassuring and encouraging 
information. And yet, this very advertisement is 
published and paid for presumably with the sole 
object of convincing the people of Canada, that 
without a high tariff wall against the United 
States, our farm implement industry must perish 
miserably! By their own showing, it is apparently 
lack of mere salesmanship that prevents the Cana- 
dian from beating the American out in this market 
without any protection whatsoever, seeing that we 
admittedly have a superior article at a lower price! 
Perhaps what our implement industry really wants 
is free admission of raw materials and a fair field. 
But human nature is so selfish. Any tariff mani- 
pulation that will put a ring fence around the home 



INDUSTRY AND TARIFF 217 

market and thus create an opportunity to arbitrar- 
ily levy higher prices and, at the same time, to de- 
crease selling cost and effort, will, of course, always 
be welcome. It is a special privilege grudgingly 
relinquished. We apparently pay a premium on 
commercial indolence and stagnation in Canada. 
The whole tariff controversy is very much before 
the public at present and the press of Canada is 
naturally taking sides according to conviction. 
The time is opportune for constructive delibera- 
tion and the reading public eagerly scans the 
columns of the press for new arguments pro and 
con. One is struck with the poverty of the protec- 
tionist argument. Some influential journals frankly 
state, that those favouring protection are appar- 
ently in the majority and as we have majority rule 
in Canada, the agrarian point of view cannot at 
present be given effect. The farmers of Canada 
are in the majority and by acting together could 
cause legislation to be passed providing that all 
taxes should be paid by the other classes; and that 
the farmers should be entirely relieved of taxation 
and should, on the contrary, receive a bonus from 
the public funds. Two or three religious denom- 
inations might similarly act together and decree 
that all taxation should be levied exclusively on 
the Presbyterians and Baptists. We are, however, 
largely governed by unwritten laws. We cannot 
with impunity create privileged classes and make 
one class of the community hewers of wood and 
drawers of water for another. The privilege of a 
majority is to select the rulers. It has, however, 



218 WAKE UP, CANADA! 

no license to impose unjust laws. The most sacred 
duty of a majority is to protect scrupulously the 
rights of the minority. Our ability to do so is the 
standard by which our civilization is measured. 

Another paper laboriously collected statistics of 
customs receipts west of Lake Superior and by 
comparing them with the total receipts found that 
they were so inconsiderable, that the West appar- 
ently had no tariff grievance at all, when almost 
everyone should know, that the bulk of western 
imports enter through the Ports of Montreal, 
Toronto and other large trading centres in Eastern 
Canada and from there are distributed throughout 
the country. 

The soundest argument against drastic tariff re- 
form that has been advanced so far seems to be, 
that by virtue of the National Policy certain vested 
rights were created in Canada and much capital 
invested in industry in good faith and that this 
capital is entitled to consideration in any fiscal 
readjustment that may be made. Also, that any 
violent changes in our tariff law would be followed 
by serious consequences. These two points cannot 
be evaded. They are not arguments in favour of 
the principle of protection, but rather a plea to 
respect legitimate property rights which cannot be 
thrust aside. It is a pity that so little trouble has 
been taken to mould intelligent public opinion on 
this subject. The western farmer has not been 
made to understand clearly that the change from 
one fiscal policy to another must of necessity be 
made by easy stages and on a well conceived plan. 



INDUSTRY AND TARIFF 219 

Common decency and common prudence would 
dictate such a course. Industries to be deprived, 
or partly deprived, of protection hitherto accorded 
them by the law of the land must be given every 
opportunity to adjust themselves to the new condi- 
tions. Whether the policy itself has been right or 
wrong has nothing whatever to do with this phase 
of the question. The farmer can be made to see 
clearly the wisdom of sympathetic aid to Canada's 
industries during any such transition period. No 
deserving industry should be seriously damaged. 
It seems to me, that the time has come when we 
are entitled to definite assurances on this important 
subject from whatever political party that is ready 
to espouse protection in Canada as a permanent 
trade or fiscal policy. The old story is out of date. 
The people are sick and tired of indeterminate 
policy. We want concrete definition. For in- 
stance, how many years does it take for an "infant" 
industry to mature? We have seen that half a 
century is too short a period to allow. The "in- 
fant" is still in the nursery and is apparently a 
good example of arrested development. What is 
the further outlook? So far, nothing has happened 
to the tariff except increases. Is it possible that our 
leading men in Canada are so out of touch with 
public opinion that they can suppose for one instant 
that such a laisser faire attitude will appeal to the 
electorate for ever? The present tendency seems to 
be to advocate "moderate" protection. This is 
merely an evasive attempt to quibble and confuse 
straight issues. Either the principle of protection 



220 WAKE UP, CANADA! 

is sound for Canada, in which event we should 
have neither low nor moderate, but adequate and 
effective protection, or, it is unsound, and should 
be abolished as quickly as circumstances allow. I 
see no room for compromise in such an issue. A cor- 
rupt political "saw-off" is no trade policy for 
Canada during the present crisis. 

7. 

It has been well said that the tariff is a local 
question. Just how local, few of us realize. For 
instance, let us suppose that the City of Toronto is 
ambitious to make ploughs. It can only be done 
under a protective tariff. Every farmer through- 
out the Dominion is then taxed, either for the bene- 
fit of the Treasury or directly for the benefit of this 
industry, according as to whether he imports his 
plough or buys one made in Toronto. Who is the 
beneficiary? Traders in Toronto, until competi- 
tion becomes keener, enjoy increased business by 
reason of the larger population brought to the city 
by this plough industry. Real estate there increases 
in value. Farmers in the vicinity get perhaps a 
little better price for their products in the Toronto 
market, than they did before. But what about the 
farmer in Prince Edward Island or in Alberta? 
Is he in the very least interested in this Toronto 
industry? If not, why should he be taxed to main- 
tain it? Unless, indeed, Toronto can show that her 
citizens are directly contributing towards the wel- 
fare of Alberta or P.E.I, farmers. It seems unjust. 

It would appear as if some system could be 



INDUSTRY AND TARIFF 221 

worked out, in the event of the protective principle 
being perpetuated in Canada's fiscal policy, of ap- 
praising the respective value of industries to in- 
dividual communities and to the country at large. 
Some contribution might then be demanded from 
the city or the county, or both, within which a pro- 
tected industry is located. If it is worth the while 
of a Canadian farmer in Nova Scotia to pay a 
large indirect tax to develop certain industries in 
Ontario or Quebec cities, it surely is worth the 
while of the property owners immediately bene- 
fited by the location and expansion of such indus- 
tries, to contribute directly towards their develop- 
ment, just as a western town would do in offering 
a bonus for the location of an industry. If not, 
what is the object of the protective tariff? If the 
population and property owners in and around 
industrial centres do not benefit, who does? And 
if they do, why not place a fair share of the burden 
where it properly belongs? Let us, at least, be 
consistent. 

If it could be clearly shown that a certain indus- 
try could be successfully developed in Canada by 
being assured the home market for a certain period 
of years, it might be quite feasible, by a system of 
import licenses, to control imports of the article to 
be manufactured, also, of course, controlling the 
domestic selling price of the said article as they 
aim to do in Australia under their fiscal system. 
This would be simple and efficient. 

There are other methods of assisting industry 
without the intervention of the protective tariff. 



222 WAKE UP, CANADA! 

A simple plan would be to bonus an industry until 
such time as its earnings, on bona fide capital only, 
exceeded a reasonable percentage. We would, at 
least, know exactly what we were doing and could 
intelligently control our actions. Under the pres- 
ent system, we merely license private interests to 
levy toll on the public without supervision. We 
"farm out" our taxes as they do in China. 

It will, of course, be objected that the country 
would never stand for a plan of direct bonus pay- 
ments. Why not? Is it because we insist upon 
being fooled and befuddled? Is the taxpayer of 
Canada so silly, that he cannot be trusted to know 
exactly how much he is to pay and what the money 
is to be used for? The world has decreed that the 
day of secret diplomacy is over. We want clear 
daylight let in upon all our public transactions. 
The argument that the country could not stand the 
financial strain of direct bonus payment is, of 
course, utterly absurd. Someone assuredly pays 
it now and if the industrial development of Canada 
is a great, national necessity, as we are assured it is, 
why, in the name of common sense, should taxa- 
tion in aid of this vital national objective, be levied 
solely and exclusively on purchasers of ploughs, 
spades, etc. The tax should in all fairness be 
equally distributed over the whole population. 

Under any fiscal system this country may adopt, 
no sound argument can be advanced in opposition 
to absolutely protecting Canadian producers 
against those of other countries attempting to 
exploit Canada as a slaughter market. The "dump- 



INDUSTRY AND TARIFF 223 

ing clause'' in the present tariff legislation is de- 
signed to deal with this evil in respect of which 
Canadian consumers, as a rule, are very superfi- 
cially informed. That a real grievance exists is 
beyond all doubt. A producer in the United 
States, let us say, finds it necessary to manufacture 
a minimum quantity of goods in order to keep his 
production costs below a certain figure. His home 
market will not absorb his entire output and, in 
order not to demoralize prices in the most valuable 
outlet for his goods, he adopts the expedient of 
shipping his unsaleable surplus to a foreign market 
to be sold at whatever prices he can realize, fre- 
quently at figures below actual cost of manufac- 
ture. This practice is much more common than 
the public realizes. Obviously, the Canadian pro- 
ducer cannot compete under such conditions for 
any length of time and his industry runs the dan- 
ger of being ruined. Once having destroyed com- 
petition, the foreign exporter would, of course, be 
able to exact his regular prices in our market. The 
advantage of low prices to the consumer is, there- 
fore, only temporary. It is also conceivable, that a 
"dumping" policy might systematically be resorted 
to in order to oust a competing industry from a 
convenient foreign market such as Canada. Cana- 
dian consumers cannot fairly object to paying a 
living price for manufactured products and en- 
lightened public opinion would doubtless support 
any Government in providing drastic legislation 
authorizing the absolute confiscation of shipments 
into Canada of goods invoiced at prices below the 



224 WAKE UP, CANADA! 

current selling values in the country where such 
goods originated. Canadian industries are ab- 
solutely entitled to a fair field in our own country, 
which by no means implies detriment to others. 
The principle involved in the restrictions sug- 
gested, is entirely different from that underlying 
the imposition of a prohibitory import duty. 

8. 

In discussing the fiscal problems facing Canada, 
no good purpose is served in playing with words 
and phrases. It is essentially a case for the plainest 
possible terminology. At the very outset, let us 
clearly realize, that the real problem facing 
Canada lies in reconciling the diametrically op- 
posed views and interests of two great geographi- 
cal sections, divided for all time to come by an 
enormous unproductive waste. These two sections 
have little in common, commercially, and are held 
together by sentiment only: a link which, in view 
of the rapid settlement of the Western portion by 
people who have no knowledge of, or natural 
sentimental interest in, the Eastern section, is bound 
to become weaker year by year. 

It is a significant fact that, in that part of Canada 
lying West of Lake Superior, only 34% of the 
population is of Canadian origin. Approximately 
29% came from Great Britain and 37% hail from 
the United States and foreign countries. There 
lies the problem. The settler from Kansas or Idaho 
neither knows nor cares any more about Hamilton 
or Toronto than the Torontonian does about Lin- 



INDUSTRY AND TARIFF 225 

coin and Leavenworth. They are merely terms, 
more or less familiar in school days and frequently 
not even that. To ask him to contribute to and wax 
enthusiastic over the industrial development of 
these cities, is absurd. This is the situation. It is 
a somewhat unpleasant situation. But nothing is 
gained by ignoring it as our public men are fond 
of doing. 

To further complicate matters, the uncomfort- 
able fact stares one in the face, that while the West 
can do much for the East in the way of supplying 
markets for industrial products, the East, having 
its own agriculture, can do practically nothing in 
return for the West, which is on an export basis. 
It is, therefore, an almost wholly one-sided situa- 
tion, as far as any suggestion of compromise on the 
tariff is concerned. This fact should also be care- 
fully pondered. 

Now, a word on the most pernicious feature of 
the whole controversy, namely, the seeming utter 
inability of the East to recognize the situation. The 
writer, though essentially a Westerner, is bound 
by every sentimental tie to Eastern Canada. His 
sole desire is to present the problem as fairly and 
impartially as this sentimental leaning will permit 
him, believing, that unless the situation is recog- 
nized before the West is politically powerful 
enough to impose its views on the rest of Canada, 
the breach will be wide and serious, and the 
ultimate end will be fierce sectional warfare. Noth- 
ing could be more deplorable than such an eventual- 
ity. When the tariff question is discussed by Eastern 

8 



226 WAKE UP, CANADA! 

public men, their attitude almost invariably is, that 
the West must sink its selfish desires and make some 
sacrifices in the common cause and thus repay the 
East for all it has done for the West. I know of 
no more tactless and irritating argument. 

9. 

Let us clear the air and be precise. What sacri- 
fices has the East made for the West? I know of 
none. If the Canadian Pacific and other railways 
were built as philanthropic enterprises and gener- 
ous gifts from the East to the West, as many East- 
erners fondly imagine, the record of the discussions 
in Parliament at the time bear no evidence of any 
such benevolent intention. These enterprises were 
given public aid to open up the West and give it 
transportation for its products to tidewater and 
thus provide markets for Eastern manufactured 
products and to comply with the agreement under 
which British Columbia entered Confederation. 
Besides, the Canadian Pacific was not built by 
Eastern Canada. It was chiefly financed by a huge 
grant of the most desirable lands of the West. As 
to the other lines of railway, the less said the better 
from that standpoint. They are dealt with else- 
where. Furthermore, at the time autonomy was 
granted the Western Provinces, there was a very 
careful accounting of every penny Canada had 
ever spent on the West, which was all considered in 
the financial settlements. We can, therefore, safely 
call the account square. 

How much of a factor has Eastern Canada been 



INDUSTRY AND TARIFF 227 

in the colonization of the West? As has been 
shown, not as much as Great Britain and the 
United States have been, although it has done its 
best. More Eastern people have probably emi- 
grated to the United States than to Western 
Canada. Then we have the argument, that Eastern 
capital has financed and built up the West. The 
chartered bank system of Canada has unquestion- 
ably been a drawback rather than an aid to West- 
ern agricultural development. Did these banks 
open up in the West with the sole object of playing 
the role of guide, friend and philosopher to the 
unsophisticated granger? Their 97o loans and 
12% dividends and bonuses sufficiently answer the 
question. And loan companies — to what extent 
were they influenced by public spirit and to what 
extent by nine per cent, interest rates? And how 
many of these self-sacrificing pillars for Western 
agriculture would lend a dollar on Western farms 
prior to the year 1900? They did not come in until 
the West had demonstrated its ability to pay inter- 
est and furnish reliable security for principal, a 
time long after United States and British capital 
had invested largely in our mortgage securities, 
with their high interest yield. 

The metalliferous mining development of the 
West was financed almost entirely by British and 
United States capital; the coal mines largely by 
Eastern Canada. Our lumbering enterprises were 
almost wholly indebted to Great Britain for their 
capital, and most of our industrial concerns were 
financed locally. Eastern wholesalers have, of 



228 WAKE UP, CANADA! 

course, opened branches to extend their trade and 
many misguided Easterners have speculated in 
Western lands, sometimes unsuccessfully. This is 
the whole story. 

At any rate, one cannot create sentimental obliga- 
tions out of ordinary, cold-blooded business trans- 
actions. Eastern capital has gone West, and will 
continue to be invested there, just as long as that 
country can pay a higher rate of interest and give 
as sound security as competing fields. This is, and 
very properly, the investor's point of view. 

I must repeat, that I have, personally, nothing 
but the kindliest feelings towards Eastern Canada, 
but I conceive it to be my duty to sound the note of 
warning, and counsel our public men to drop all 
this pernicious cant, and face cold facts. From a 
point of view of sound public administration, no 
section of a community has any right to expect eco- 
nomic sacrifices from another merely on a plea of 
sentiment, except during periods of grave national 
crises, such as the recent war. On this occasion the 
West did, at least, its full duty. 

Let us at once honestly admit, that the West 
owes the East nothing that can be calculated in 
dollars and cents. During many weary years, the 
West has submitted to a severe fiscal handicap, for 
which the East could not give an adequate quid pro 
quo. By these sacrifices the West has contributed 
to the building up of great industries and financial 
institutions east of Lake Superior, with the in- 
cidental creation of a better market for the East- 
ern farmer and of high land values in Eastern 
cities. 



INDUSTRY AND TARIFF 229 

It is scarcely worth while to answer the silly 
argument, that if the West will loyally assist the 
East to build up its industries, some day there will 
be markets available there for Western agricultural 
produce. In the first place, Eastern Canada has a 
sufficient area of agricultural lands to amply take 
care of any farm produce, outside of wheat, that 
might be required in her own territory through 
any industrial expansion that is likely to occur. 
And to the West, of course, it is immaterial whe- 
ther she sells her wheat in Toronto or in Liver- 
pool, as the world price is fixed in the latter mar- 
ket. Secondly, if the West, with its enormous agri- 
cultural areas, had to depend upon such a restricted 
market, its future would be desperate indeed. 
Canada is so overwhelmingly agricultural, that 
local markets for the leading products of our farms 
will always be a forlorn hope. 

10. 

Those who have lost faith in the protectionist 
argument may, I presume, just as well become re- 
conciled to the idea, that the presentgenerationwill 
scarcely live to see the day when Canada will dis- 
pense with consumption taxes of sorts. The best 
that may be hoped for is, that such taxes will be 
levied with proper discrimination. A distin- 
guished ex-Finance Minister, who should know 
better, recently stated, on the floor of the House, 
that he was unalterably opposed to dealing with 
the tariff through a commission. He held that this 
responsibility rested on the Finance Minister. He 



230 WAKE UP, CANADA! 

is, of course, technically, entirely wrong. Fiscal 
responsibility rests, first, on the Cabinet of the day, 
and secondly, on Parliament for giving legislative 
effect to the budget. This, however, is mere 
sophistry — political camouflage. 

What he really pleads for is inefficient adminis- 
tration or corruption, or both. This stickler for 
individual ministerial responsibility evidently 
wants the tariff to remain as the principal issue in 
party politics, so that both sides may continue to 
befog and bedevil the voter with glittering gener- 
alities and high sounding phrases, while the pro- 
tected interests are quietly pulling the strings be- 
hind the scenes. He virtually pleads for free op- 
portunity on the part of the "machine" of politely 
blackmailing the industries of Canada for cam- 
paign funds, in return for which the grateful party 
in power may confer upon them the privilege of 
looting the consumer — that is, the voter. He 
pleads, in fact, for the status quo — the good, old, 
rotten system that has been tried and found want- 
ing. He is almost precisely five years behind the 
times. He really should wake up! 

I cannot resist the temptation to "tell tales." 
This one has a point to it. Some years ago I ap- 
peared officially before this same gentleman's 
amateur "ministerial" tariff commission in behalf 
of the Territorial Sheep Breeders' Association. We 
urged the removal of the duty on coyote proof 
woven wire fencing so as to encourage the small 
flock in the West. I argued that Canada's sheep 
industry was vanishing and, incidentally, pointed 



INDUSTRY AND TARIFF 231 

out, that the tariff as regards raw wool was, and 
always had been, (and is today), dishonestly ad- 
ministered. Not a dollar had ever been collected 
by the Government of Canada on importations 
running into hundreds of millions of pounds of 
raw wool, although the tariff distinctly contem- 
plated, that only wools of a character not grown in 
Canada shall be free. I showed that practically 
every recognized class of wool was then grown in 
Canada and had been for a long time. But the 
wool schedules had not been revised for forty years, 
while history was written in sheep breeding and 
woollen manufacturing in this country! 

Having clearly demonstrated, by speech and in 
writing, the screaming absurdity of the present 
antiquated, meaningless wool schedules and also, 
that even the plain letter of the existing law was 
being flagrantly violated, did our ex-Finance Min- 
ister and his colleagues rush frantically back to 
Ottawa to set this matter right? Not at all. The 
farmers of Canada have learned, that whenever the 
interest of agriculture clashes with that of pro- 
tected industry, the result is a foregone conclusion. 
The situation, of course, remained exactly as it was 
and — still remains. And this honourable gentle- 
man now calmly tells us, that we don't want a tariff 
commission! 

One is willing to make every reasonable allow- 
ance for sheer ignorance. Neither the ex-Finance 
Minister nor his colleagues probably knew an 
Oxford Down sheep from a barn door. But the 
suspicion lurks away back in my mind, that they 



232 WAKE UP, CANADA! 

were vastly more concerned about easy money for 
the manufacturer and avoiding uncomfortable 
complications with these importunate individuals 
by the simple and effective expedient of continuing 
to connive at the violation of both the plain letter 
and plain spirit of the law, than they were about 
promoting the sheep industry of Canada. Needless 
to add, the duty was not removed from our wire 
fencing. 

Talking about sheep, now I come to think of it, 
perhaps this notoriously passive attitude of the 
State towards agriculture is the reason why, while 
Australia has 58 sheep per hundred acre farm; 
Great Britain, 52; Italy, 21; Argentina, 15. 
France, 13. Holland, 12. Canada has — I am really 
ashamed to record it — actually two (2) whole 
sheep for each farm of one hundred acres! And, I 
may add, that with the exception of New Zealand 
and possibly Tasmania, there is no country under 
the sun possessing greater natural advantages for 
sheep farming than Canada. 

The fact is, that our tariff has been framed and 
generally administered by statesmen whose vision 
has been strictly limited by Montreal on the east 
and Toronto on the west. If we are to have a tariff 
in Canada we simply must have a tariff commis- 
sion. Two things should be absolutely removed 
from our tariff legislation, namely, politics, and its 
attending evil, corruption. Such a body would 
necessarily report its findings to the Finance Min- 
ister, who is responsible for procuring revenue, 
and whose duty it would be to give effect to its 



INDUSTRY AND TARIFF 233 

recommendations as fast as circumstances permit- 
ted. It would also act as a bulwark between the 
Government and industry. Its reports should, 
however, be submitted to Parliament for its 
information. The principle should be clearly laid 
down, that the business transactions of any indus- 
try, subsidized by the consumers of Canada, can- 
not be considered confidential. We must have 
clear daylight on our tariff beneficiaries. 

At any rate, whatever vestige of the old tariff 
ultimately remains in force, it must be adminis- 
tered on a business basis, and protected industries 
must be given to understand, that they must make 
good within a reasonable period of years or they 
had better direct their activities into other chan- 
nels. Canada cannot afford to carry industrial 
pensioners on her pay list for any unlimited period. 
Protection must be based solely on the ascertained 
necessity of any industry which apparently has a 
reasonable chance to succeed under our conditions. 
Paying four dollars for two-dollar woollen gar- 
ments in a cold country, will, as a permanent pro- 
position, appeal to no considerable section of the 
community. 

11. 

Those who have followed my reflections up to 
this point, will doubtless conclude that the situation 
is somewhat desperate; that the attitude of the 
West, on the subject of tariff, is uncompromising 
to the extent that nothing short of a complete 
reversal of Canada's present fiscal policy would 



234 WAKE UP, CANADA! 

prove satisfactory. This at once brings us face to 
face with the uncomfortable fact, that such a 
departure in public policy would probably be re- 
sisted by the East — that is, by the majority — which, 
of course, would place it entirely beyond the scope 
of practical politics. In other words, we have an 
almost exact replica of the present Irish situation 
— and yet, even that will be solved. While it is 
true, that in our tariff issue, there is no "common 
ground," there is such a thing as minimum de- 
mands and maximum concessions. That is the side 
of the controversy that must be studied and devel- 
oped. 

The Western farmer suffers under precisely the 
same disabilities as other large groups of voters. 
He is just as easily victimized and led astray by the 
demagogue and rabid partisan politician. In the 
past, there has been no choice between the great 
parties on the tariff issue. Hence, he has now 
thrown them both overboard and has constructed 
a platform of his own. This is what he officially 
asks in the way of tariff reform: 

1. That the customs duty on goods imported 
from Great Britain be reduced to one half the 
rates charged under the general tariff and that 
further gradual, uniform reductions be made in 
the remaining tariff on British imports that will 
ensure complete free trade between Great Bri- 
tain and Canada in five years. 

2. That the Reciprocity Agreement of 1911, 
which still remains on the United States' statute 
books, be accepted by the parliament of Canada. 



INDUSTRY AND TARIFF 235 

3. That all food stuff not included in the 
Reciprocity Agreement be placed on the free 
list. 

4. That agricultural implements, farm 
machinery, vehicles, fertilizers, coal, lumber, 
cement, illuminating fuel and lubricating oils be 
placed on the free list. 

5. That the customs tariff on all the necessaries 
of life be materially reduced. 

6. That all tariff concessions granted to other 
countries be immediately extended to Great 
Britain. 

Let us examine this platform and see what it 
means in plain English and what it stands for, in 
the eyes of the average Western farmer. Points 1 
and 6 are largely sentimental. All patriotic citi- 
zens would hail with satisfaction any such develop- 
ment. Point 2 is of overwhelming importance. 
Point 3 is desirable, but not absolutely essential. 
Point 4, he is in deadly earnest about. Point 5 is 
in the same class as 3. That is the story. In the 
final analysis we find two planks in the farmers' 
tariff manifesto, 2 and 4, that will probably repre- 
sent the minimum demands on the subject on the 
part of the average, thinking prairie farmer. 

These two demands can be met, and should be 
met, not only because a large section of Canada's 
producers mean to fight for them, but chiefly be- 
cause it is essential to our general prosperity, that 
effect should be given to them. I shall be told, that 
in a previous general election Canada, by a large 
majority, rejected the reciprocity proposals. That 



236 WAKE UP, CANADA ! 

is true. But Canada would not do so to-day. No 
public man, with his ear to the ground, will deny 
that assertion. 

In Chapter Sixteen I am dealing more at length 
with the question of markets for the farmer's pro- 
ducts and I merely desire to state here, that, leav- 
ing aside the duty on the commodities included in 
Par. 4 of the Manifesto quoted above, the farmer 
is vastly more interested in permanent access to the 
United States' markets than in immediate relief 
from the effects of the present consumption taxes 
on food, clothing, furniture, etc., however irksome 
they may be. These taxes could not, by any stretch 
of imagination, be magnified into an item of such 
importance, that it could have a seriously detri- 
mental effect on his business operations. The two 
issues have always been linked together and con- 
sidered together, notwithstanding the fact that they 
are only remotely related to each other. 

I have now stated what I deem to be the mini- 
mum demands of the farmer. They do not look 
so formidable. He now enjoys access to the mar- 
kets of the United States for his principal pro- 
ducts, but the arrangement hangs on a very slender 
thread. If severed, farming in Canada, at least as 
far as the West is concerned, at once becomes a pre- 
carious undertaking. The issue of reciprocity is 
not one necessarily to be dealt with immediately. 
The other issue cannot be postponed. But construc- 
tive proposals, involving gradual relief and indica- 
tive of good faith, might meet the present situation 
and would instil confidence in the desire of the 



INDUSTRY AND TARIFF 237 

Government to fully meet the farmer's reasonable 
demands, as soon as the general financial situation 
of the country permitted of the complete realiza- 
tion of his representations. The farmer is essen- 
tially a practical man and will comprehend prac- 
tical obstacles to his platform, if properly ex- 
plained. But all our public men are silent on their 
tariff attitude — oh, so very silent! Consequently, 
we have no enlightened public opinion. Get the 
tariff out of politics, so that we can discuss the 
problem freely and with all "the cards on the 
table." That will clear the air and bring us to- 
gether on an all-Canadian platform. That is 
where this controversy belongs. 



CHAPTER TEN 

THE LOOTING OF CANADA 
1. 

AS has been shown in the previous chapter, 
various avenues of protection and aid have 
been provided for struggling industries in Canada. 
The levying of import duties prevents the market- 
ing of imported articles in Canada, except at a 
premium proportionately equal to the amount of 
protection and theoretically sufficient to permit the 
home manufacturers of such articles to reap a sat- 
isfactory profit. Then there is our much abused 
bonusing system under which Canada is said to 
have paid out more money than those fortunate 
industries have ever paid in wages. But in the fin- 
ancing of most of the large industrial concerns, 
further protection was accorded, inasmuch as they 
were permitted to load their capitalization with 
"water," and thus, in many cases, make twice or 
three times the profit that the suffering consumer 
would otherwise have tamely submitted to. It 
will be observed, that there is more than one way 
of protecting industry. 

The method of inflating capital is, of course, 
familiar to almost everyone. A number of indus- 
trial concerns are consolidated into one, and in 
buying them out fictitious valuations are agreed 
upon for goodwill, formulae, real estate or leases. 

(238) 



THE LOOTING OF CANADA 239 

Or, a new Company is formed to buy out an exist- 
ing one on the same inflated basis, paying for tan- 
gible assets in bonds or preference stock and issu- 
ing common stock for goodwill. Or, large blocks 
of common stock are taken by the promoters in 
payment for services. The general principle is 
that unless the business makes a success and pro- 
fits on its common stock, the latter has no special 
value. This, however, it seldom fails to do, in 
course of time. The general effect is, that while the 
common stock is almost intrinsically worthless, in- 
asmuch as it represents no realizable asset or even 
only fictitious assets, the inordinate profits on the 
actual capital, upon which fixed dividend or inter- 
est is paid, soon leave a surplus for the common 
stock, which begins to rise in value and frequently 
reaches par. In time accumulated earnings may 
give it an actual intrinsic value, which has, of 
course, been entirely contributed by the public. 

A protected industry earning six per cent, on its 
actual investment, would cause no particular com- 
ment. If, however, the earnings were twelve or 
eighteen per cent., consumers would demand an 
explanation. But by the injection of a judicious 
amount of "water," such a situation is effectually 
hidden from view, while, quite incidentally, one or 
two get-rich-quick promoters graduate into the 
millionaire class. The evil in question is fully 
recognized and admitted by our public men when 
out of office. It makes capital campaign talk. 
With office attained, however, they apparently dis- 
cover insuperable obstacles to any sort of effective 



240 WAKE UP, CANADA! 

control of the capitalization of industry. In other 
words our supermen have feet of clay. In this 
Canada of ours we attempt, and not unsuccessfully, 
to make our citizens walk the narrow path. The 
criminal law deals with the thief and the murderer. 
We even punish the merchant if he cannot sub- 
stantiate the truth of his advertisements. We fine 
the careless one for expectorating on the sidewalk 
or for having weeds growing in his backyard, or 
chickens running at large. But when we con- 
template the proper control of high finance, to 
prevent millions from being filched from the pock- 
ets of Canadian consumers and small investors, we 
confess that we are up against a veritable stone 
wall. It simply cannot be done. The stealing of 
pennies we can punish; the stealing of millions 
must remain "within the law"! A grateful coun- 
try even confers titles on the most outstanding ex- 
ponents of this gentle art. 

2. 

We have on our statutes a Companies' Act; a 
formidable document, about the size of a small 
novel. It contains the most minute directions as to 
how incorporated companies shall be formed and 
their business conducted. Woe be unto the trans- 
gressor, if only five days notice is given for a meet- 
ing where six is clearly prescribed! One step in 
advance would be a little section calling for a 
sworn statement from incorporated companies, and 
those ambitious to become incorporated, showing 
separately the actual value of all tangible assets 



THE LOOTING OF CANADA 241 

under prescribed headings, and the estimated value 
of intangible assets with supporting evidence as to 
the value of the estimate, in the form of an auditor's 
formal certificate. Heavy punishment should also 
be provided for failing to show this information 
and for showing it in any misleading way in pub- 
lished statements and prospectuses. This would 
not completely solve the difficulty, but it would, in 
many cases, defeat the intentions of swindlers by 
giving fair notice to the public. 

We should also absolutely prohibit the issue of 
common stock as a bonus to purchasers of bonds or 
preferred stock. Offers of this sort appear almost 
daily in the advertizing columns of the press. 
What justification is there for such pernicious prac- 
tices? To insist upon all common stock being sold 
at par and fully paid for would appear to be no 
more than ordinary honest business. As long as 
such transactions bear the seal of official authority, 
it will be impossible to control adequately the capi- 
talization of business and industry. The door is 
left wide open for dishonest manipulations, over- 
capitalization and all the other evils from which 
we are now suffering. If any concern cannot pro- 
cure its capital by legitimate methods and finds it 
necessary to resort to shady practises of this char- 
acter, the country would be better off without it. 
Special authority to sell stock below par could, if 
necessary, readily be issued in the case of mining 
companies and other enterprises of a highly spec- 
ulative nature, upon proper representations being 
made by the promoters and after competent investi- 
gation by the Government. 



242 WAKE UP, CANADA! 

It does not seem to be unreasonable for the State 
to insist upon ordinary honesty in connection with 
the flotation and management of incorporated com- 
panies. The Provincial Governments of Canada 
have, as a rule, made good progress in this direc- 
tion, but they only deal with the "small fry." The 
duty rests upon the Dominion authorities to pro- 
vide such legislation as will prevent the wholesale 
"watering" of stock issues. Under the new order 
of things the public will stand for nothing less. 
We must have Federal "Blue Sky" legislation and 
honest financing. 

3. 

Who are the capitalists? It is customary at 
farmers' meetings and in the sensational press to 
refer to capitalists as the "interests." It is the 
popular conception, that the ownership of capital 
is vested in certain pot-bellied gentlemen whose 
sole occupation in life is to clip coupons, oppress 
the poor and corrupt our legislatures. This is 
scarcely a fair definition. 

A glance at the list of shareholders of our rail- 
ways, banks, and large industrial concerns in 
Canada hardly confirms any such idea. We find 
generally that the majority of stockholders are 
men in very modest circumstances, widows, 
dependents and a fair sprinkling of well-to-do peo- 
ple. The latter may, and often do, hold the major- 
ity of the stock, but not by any means in all cases. 

All sorts of drastic proposals were made to "con- 
fiscate" wealth. It was a favourite term during the 



THE LOOTING OF CANADA 243 

war period. It is well, however, to realise, that a 
very large proportion of the capital invested in 
Canadian enterprise is composed of the savings of 
quite plain, ordinary people, who could not, by any 
stretch of imagination, be included under the gen- 
eral heading of capitalists or "interests." 

This is a difficulty that the reformer encounters 
when he considers the question of squeezing the 
water out of corporations doing business on in- 
flated capital. Generally these small blocks of 
shares have been purchased at prevailing market 
prices and represent bona fide investments which 
cannot be "confiscated" or cancelled with im- 
punity. 

The only remedy therefore, that can be applied 
against the recognised evil of "watering" stock 
issues, is to regulate future issues of existing cor- 
porations and to exercise eternal vigilance in con- 
nection with the formation of new ones. The evil 
is done and cannot be undone, but the public is en- 
titled to ample protection in the future. The flota- 
tion of war loans in Canada has created an enor- 
mous number of investors and they will be re- 
garded as the legitimate prey of promoters. They 
must be amply protected, so far as the State can 
protect them. 

4. 

I submit here a statement showing detailed in- 
formation regarding a number of the larger indus- 
trial enterprises of Canada. I have marked 
opposite each the amount of protection these lusty 



244 WAKE UP, CANADA! 

"infants" enjoy. I have been so anxious to avoid 
any semblance of unfairness, that I have not in- 
cluded in the amount of the protective tariff the 
extra war-tax of approximately seven per cent. 
Thus, an industry enjoying 35% protection, was 
during the later years of the war, and is now, gen- 
erally on a basis of 42% protection! It is import- 
ant to bear in mind, that I deal with the common 
stock only. These corporations have, in nearly all 
cases, bond issues and preferred stock issues in 
addition to the common stock, amounting to many 
millions of dollars. I have deducted from their net 
earnings the amounts required to pay interest on 
any bond and preferred stock issues. What is 
shown as earnings in this statement only covers the 
amount available for distribution amongst the 
holders of the common stock. 

It is also well to remember, as has been pointed 
out previously, that in most cases, the bulk of the 
common stock, in some cases practically all of it, 
merely represents allotments to promoters and 
bonus allowances to purchasers of the company's 
preferred stock or bonds. It is therefore in many 
cases clear loot, upon which the consumer has to 
provide dividends. 



THE LOOTING OF CANADA 



245 






Statement showing earnings of common stock, 
after deducting dividends on preferred issues, of 
some industrial enterprises in Canada. 



Name of Company 



o I 



to »o 
e .S <=> 

11° 



I "8 

S W 



Z -3 



§ s 



U O (J 

g OT >* 
CU 

% 



".81 



Manufacture 



Protection by 
Customs Tariff 



Can. Car and Fdry. Co 

Canada Cement Co 

Canadian Cottons, Ltd 

Canadian General Electric 

Canadian Locomotive Co 

Dom. Bridge Co 

Dom. Canners, Ltd 

Dom. Steel Co 

Dominion Textile Co 

Laurentide Co 

Lake of the Woods Milling Co. . . 

Maple Leaf Milling Co 

Nova Scotia Steel and Coal 

Ogilvie Flour Mills Co . . 

Penmans, Ltd 

Price Bros. & Co 

Riordon Pulp & Paper Co 

Sherwin-Williams Co. of Can. . . . 

Steel Co. of Canada 

Woods Manufacturing Co., Ltd. . 



4,963 


9.9 


13.500 


5.6 


2,715 


10.59 


8,000 


11.1 


2.000 


15.3 


6.500 


20.7 


2.794 


9.3 


37.097 


10.9 


5,000 


13.0 


9.600 


12.2 


2.100 


19.5 


2,500 


17.4 


15,000 


15.1 


2,500 


42.9 


2.150 


22.3 


5.000 


II. 


4,500 


10.7 


4,000 


8.6 


11,500 


16.1 


1.718 


13.4 



17.9 
9.6 
18.31 
12.4 
24.1 



72. 

35. 

18. 

21.4 

12.8 

32.0 

25 2 



53.0 
14.3 
27.0 
12.1 
37.7 
14.4 
44.2 
33.0 
22.8 
9.8 
22.2 
23.4 
12.7 
38.2 
44.1 
13.2 
18.3 
21.3 
44.4 
30.0 



Steel Axles, etc 

Cement 

Cotton Fabrics 

Electric Apparatus . 

Locomotives , 

Structural Steel 

Canned Fruits 

Steel Rails 

Cotton Fabrics 

Pulp and Paper 

Wheat Flour 

Wheat Flour 

Rolled Bar Iron or Steel 

Wheat Flour 

Underwear 

Pulp 

Pulp and Paper 

Paints 

Forgings of Iron or Steel 
Jute Bags, etc 



35% 

10c. per 100 lbs. 

25% to 3 2^% 

27K% 

35% 

35% 

2^c. per lb. 

$ 7 per ton 

25%to32^% 

25% 

Free 

Free 

$7 per ton 

Free 

35% 

25% 

25% 

30% 

30% 

20% 



CHAPTER ELEVEN 

SCIENTIFIC AND COMMERCIAL RESEARCH 
1. 

THE amount of good human material going to 
waste at the nation's capital is saddening to con- 
template. Canada is a new country with vast 
natural resources, which, alas, are not always 
located in available places. For instance, while we 
have both coal and iron deposits in abundance, they 
cannot be developed conjointly, for various reasons. 
One cannot imagine any situation that would indi- 
cate more clearly the vital necessity of a national 
policy, having for its purpose the closest co-opera- 
tion of all available forces towards solving the 
numerous problems involved in making the most 
out of our natural resources, and overcoming, 
where possible, the handicaps that nature has 
placed in the way of this very desirable object. 

Canada has in her public services at Ottawa, all 
the human material necessary to promote a vigor- 
ous development policy of this kind. But it is 
scattered, ineffectively organized and in many in- 
stances, thoroughly discouraged and demoralised. 
We have first an "Honorary Advisory Council for 
Scientific and Industrial Research." The very 
name would damn it forever. This body under- 
takes industrial investigation and is building up a 

(246) 



SCIENTIFIC AND COMMERCIAL RESEARCH 247 

technical staff. Its administration is at present 
under the control of a most able and highly quali- 
fied chairman. Then we have the "Conservation 
Commission," also undertaking somewhat similar 
work and also surrounded with a technical staff. 
We have the Dominion Department of Mines con- 
ducting investigation within its own field, which, 
of course, pretty nearly covers everything there is 
to be done. That also has a large and highly quali- 
fied staff. In addition to this, in the Province of 
British Columbia, and in each of the Eastern Prov- 
ines, a Mining Department is maintained. In the 
Department of Forestry, the Conservation Com- 
mission is very active and is well equipped for use- 
ful work. The Department of the Interior, how- 
ever, administers Canada's forests, except where 
natural resources are under Provincial Control, in 
which cases local departments are maintained. 
This department also promotes tree planting in 
Western Canada most efficiently. Our fisheries are 
very ably looked after by one Department in Ot- 
tawa, with occasional duplication by the Conserva- 
tion Commission. Each one of these Departments 
and Branches publishes in blue books or in pam- 
phlets, formidable reports on its technical work 
and investigation, which, of course, are hardly ever 
read by anyone. If one wanted everything that had 
been published to date on any given subject, he 
would probably have to get into communication 
with three or more different sources. There is 
absolutely no general clearing house for technical 
information, and there is a vast amount of useful 



248 WAKE UP, CANADA! 

information going to waste, simply because there 
is no effort made to co-ordinate it for useful pur- 
poses. 

These are some of the conditions that handi- 
capped the Allies in the early stages of the Great 
War. Unless Canada's future industrial expansion 
is to be endangered we must enlist the services of 
our outstanding men; we must no longer waste 
official energy, or any other good material avail- 
able, for which the country pays. 

Great Britain's known coal deposits amount to 
189 billion tons. Canada possesses twelve hundred 
billion tons of coal, which means three quarters of 
all the coal deposits in the whole of the British 
Empire, and one twelfth of the known coal deposits 
of the world. These deposits are not by any means 
inaccessible. They are in fact in almost all cases 
located near railway lines, and, in some instances, 
on tidewater. During 1917 we used in Canada 
nearly 35 million tons of coal. And we mined in 
Canada 14 million tons, out of which we exported 
1?4 million tons. We imported from the United 
States 22y 2 million tons or approximately two- 
thirds of all the coal we used! This looks queer. 
I mention it only to impress upon the reader the 
fact, that to make laborious analyses of our coal 
does not solve our problem, which is entirely one of 
markets for our products. It is primarily commer- 
cial investigation and exploitation Canada needs., 
with such technical and scientific assistance as each 
problem may call for. 



SCIENTIFIC AND COMMERCIAL RESEARCH 249 

2. 

I realize that it is rank heresy to critize the 
work of scientific men. But I am not going to 
criticize their scientific work. I am going to con- 
fine my remarks to the business aspect of the case. 
A business Government would call a joint meeting 
of all those now engaged on technical research 
work and ask for report and suggestions. Further, 
let some specially qualified business man be ap- 
pointed to investigate the scope of each depart- 
ment or branch affected; let him report his finding 
to a select committee of the Privy Council, and so 
co-operate in bringing order out of the present 
chaos by the creation of some central supreme 
body or by constituting one of the existing organ- 
izations, such as the Honorary Advisory Council, 
the central clearing house with the necessary auth- 
ority to discontinue aimless scientific investigation 
and to focus the effort of Canada's scientific staffs 
upon practical and useful objectives. Such 
method, organized along rational lines to get 
results, would co-ordinate existing effort, abolish 
duplication and inform the public. 

While on this subject, it is appropriate to offer a 
few remarks touching a very common fallacy enter- 
tained by Governments, namely, that technically- 
qualified men are able to advise intelligently on 
matters of pure business. They have their proper 
field and so has the business man. There should be 
the clearest distinction made, however. On such 
a board as referred to above, the clear headed busi- 



250 WAKE UP, CANADA! 

ness executive should find a prominent place. Im- 
mediately on organization, it would compile a list 
of the most highly qualified technical experts in 
Canada in private employ. It would then cir- 
cularise these men, stating the objects of the organ- 
ization and inviting their patriotic co-operation. 
This would doubtless be enthusiastically and spon- 
taneously forthcoming. It should be realised, that 
however skilled may be the technical men em- 
ployed permanently by the Government or en- 
gaged in research work in connection with our var- 
ious universities, they cannot possibly hope to 
speak authoritatively on every subject and every 
phase of scientific research. Besides, they are too 
far removed from the field where practical results 
only will count, and where new avenues of investi- 
gation are daily opening up. Consequently, they 
do not always know the last word on any subject. 
It would, therefore, naturally suggest itself to a 
business man, that instead of maintaining large ex- 
pensive technical staffs at headquarters, it would 
be much more economical, and certainly much 
more effective, to arrange temporarily to utilize 
specialist talent in connection with specific lines of 
investigation. 

But it is not alone in the field of scientific re- 
search that new ground should be broken. Good 
work could be done through governmental chan- 
nels in a dozen other directions. We need some 
trade body with proper machinery, to give the 
helping hand in the marketing of our products and 
in the discovery of new markets. Generally speak- 






SCIENTIFIC AND COMMERCIAL RESEARCH 251 

ing, the cost of selling is getting larger daily. Be- 
tween the cost of manufacture and the retail price 
to the consumer, there is a figure so large that it is 
fairly staggering. Our commercial system is 
becoming more and more complicated, topheavy 
and expensive; the cost of distribution is now, in 
most cases, the main factor in the price of com- 
modities. 

Our statistical system, as far as it deals with 
interprovincial trade, could with advantage be 
greatly augmented. The volume and value of 
internal trade are unknown factors in Canada. In 
connection with our export trade, we have much 
to learn from our recent foe in Europe. Ger- 
many's system of commercial intelligence and fin- 
ancial accommodation gave results which it would 
be worth our while to study. The development of 
our municipal markets is another subject worthy 
of consideration. Much has been done in Europe 
in this direction, and the example might well be 
followed in Canada. This would tend to bring the 
smaller producers and consumers closer together, 
with the elimination of distribution cost. Stand- 
ardization of products, particularly for the export 
markets, would bear fruit, and promote Canadian 
industry. All these tasks require leadership, which 
can best be furnished by the Government. 



CHAPTER TWELVE 

A NATIONAL TRIAL BALANCE 
1. 

IT will be instructive to make a brief survey of 
the financial standing, and past financial record, 
of this enterprise called the Dominion of Canada. 
I shall deal with the head office first. The sub- 
offices, called the Provinces, and the country 
branches called the Municipalities, will also be 
lightly touched upon. 

Canada started business in 1867 with a gross debt 
of 93 million dollars and an interest liability of 
4^< millions. I shall not deduct the assets, as out- 
side the sinking fund, they are not in liquid form 
and are not realizable. No one wants to buy a 
Post Office or a bridge, even if we were able to sell 
it. At that period Canada's total income from 
taxation was about \\ J / 2 million dollars. I deal in 
round numbers, as too much detail is confusing and 
quite unnecessary for our purpose. Twenty years 
after, our debt had increased to 273 millions, in- 
terest liability 9]/ 2 millions, and revenue 2%]/ 2 mil- 
lions. In 1908, forty-one years after Confedera- 
tion, our debt was 408 million dollars, interest lia- 
bility 11 millions, and our taxation revenue 73^ 
millions. In 1914 the war broke out. Our debt 
increased to 544^ millions, interest engagements 
12% millions and revenue from taxes 127^ mil- 

(252) 



A NATIONAL TRIAL BALANCE 253 

lions. We ended the war with approximately 1,200 
millions of gross public debt, interest engagements 
of about 26 millions per annum, and annual 
revenue from taxation of somewhere near 176 mil- 
lion dollars. Our reconstruction programme will 
doubtless lead to increased liability. 

Dealing now more particularly with the question 
of public debt, it is interesting to take a glimpse of 
the position of the various provinces in this respect 
up to the end of their last fiscal years : — 

Prince Edward Island $11,154,000 

Nova Scotia 13,910,000 

New Brunswick 17,827,000 

Quebec 38,449,000 

Ontario 61,795,000 

Manitoba 38,506,000 

Saskatchewan 26,797,000 

Alberta 30,595,000 

British Columbia 35,673,000 

Total $264,706,000 

These figures are not absolutely correct. I defy 
the most expert auditor to dig out the exact figures. 
Each province has a beautiful system of accounts 
of its own, generally designed to hide the facts and 
confuse the public. And to show just how much 
progress we have made in Canada towards co- 
ordination in public finance, I might mention, that 
the fiscal year of British Columbia ends on March 
31st, that of Saskatchewan on April 30th, that of 
Quebec on June 30th, that of Nova Scotia on Sep- 
tember 30th, that of Ontario and New Brunswick 
on October 31st, that of Manitoba, November 
30th, and that of Prince Edward Island and 
Alberta on December 31st. It will thus be clear, 



254 WAKE UP, CANADA! 

that every facility exists to enable the inquisitive 
statistician to make instructive comparison! 

But when we enter the field of municipal indebt- 
edness, we behold chaos in its most typical form. It 
should be some concern of Canada, and Canada's 
creditors, to know the total liabilities of our muni- 
cipalities. There is, however, no individual in the 
whole, wide world who knows that. If a business 
concern kept track of its gross liabilities in this 
way, the courts would be called upon to interfere. 
However, I am going to make a guess based on 
certain known factors. We have records available 
from 62 cities and towns in Canada, showing the 
total indebtedness to be 456 million dollars. The 
total population of these centres is, I find, 
2,598,000. This makes the indebtedness per head 
$210.17. As these cities and towns are so located 
as to be fairly representative of the whole, we shall 
not be very far wrong in applying the latter figure 
as the key to the whole situation. Therefore, the 
total population in Canada residing in urban com- 
munities of over 500 inhabitants being 3,281,000, 
the total municipal indebtedness of Canada, based 
on $210.17 per head, would be 689*/ million dol- 
lars. It will be noticed, that this amount comes 
next in importance to our present Federal indebt- 
edness, and, outside our obligations due strictly to 
unforeseen expenditure for purposes of war, is the 
most considerable item in Canada's total liability. 

To sum up, we find our public indebtedness, 
half of which is probably held internally, distrib- 
uted as follows : — 



A NATIONAL TRIAL BALANCE 255 

Head Office 1,200 millions 

Sub Offices 264 1^ " 

Country Branches 689 1^ " 

Total 2,154 millions 

What does that mean? We have in Canada \y 2 
million families. Each family is apparently respon- 
sible for the sum of $1,436 of public liabilities in 
addition to its private liabilities, including the 
mortgage on the old homestead. Of course, the 
sheriff is not coming in tomorrow to collect this 
amount under distress warrant, the creditors being 
kind, good people who will wait — as long as you 
pay your interest fairly promptly. But with the 
stress of the reconstruction period ahead, it will do 
no harm, when you make up your list of liabilities, 
to add the sum of $1,436 just to get used to the 
idea, that you must pay interest on this with the 
same regularity as you pay your life insurance 
premium or the instalments on your cheerful little 
home. This is the first lesson that the New Canada 
has to learn. 

In discussing the liabilities of Canada, we have 
hitherto dealt exclusively with public liabilities, 
that is, those owed by the State, including the prov- 
inces and municipalities, which must be carried 
and repaid by taxation. These are partly owed to 
our own citizens and partly to residents and institu- 
tions in other countries. 

It is of interest in this connection to give a bird's 
eye view of Canada's external liabilities, public and 
private. Fred. M. Field and the "Monetary 



256 WAKE UP, CANADA! 

Times" give the following information on the sub- 
ject: 

British Capital Invested in Canada. 

20 Branch Plants, average capital, $300,000. $6,000,000 
Canadian Bank Shares held by Industrial 

Purchasers 2,000,000 

Investments with Loan & Mortgage Com- 
panies 12,000,000 

British Insurance Companies' Assets in 

Canada 30,000,000 

Municipals sold Privately 15,000,000 

Industrial Investments 29,000,000 

Mining Investments 59,000,000 

Land and Timber Purchases 40,000,000 

Town and City Purchases 25,000,000 

Canadian Flotations, 1905-1913 1,660,900,000 

Total $1,878,900,000 

United States Capital Invested in Canada. 

500 Branch Firms (average investment 

$300,000) $150,000,000 

Government, Municipal and Corporation 

Bonds (1905-1913) 123,743,000 

Government, Municipal and Corporation 

Bonds ( 1914-1917) 590,506,000 

Insurance Company Investments 94,276,000 

British Columbia Mills and Timber 75,000,000 

British Columbia Mines 62,000,000 

British Columbia Land Transactions 60,000,000 

Prairie Province Land Transactions 41,000,000 

City and Town Properties 20,000,000 

Maritime Province Investments 13,125,000 

Industrial Investments (Miscellaneous) .... 12,200,000 

Prairie Province Timber and Mines 10,500,000 

Agricultural Implement Firms 9,250,000 

Packing Plants 6,750,000 

Theatrical Enterprises 3,500,000 

Prince Edward Island (Fox Farms) 1,000,000 

Total $1,272,850,000 



A NATIONAL TRIAL BALANCE 257 

The British figures here quoted do not go beyond 
1913. It is, however, estimated that Canadian flota- 
tions in London up to 1918 have amounted to $937,- 
864,000. This would make a total of $2,816,764,- 
000. Adding this amount to our liabilities to 
the United States, we find Canada's total estimated 
external capital liability to be about 4,089 million 
dollars, as far as these two countries are concerned. 
Other countries have investments in Canada, not- 
ably France and Holland. If we estimate our total 
capital liabilities at somewhere below five billions, 
we shall probably not be far wrong. This is not, 
of course, a floating liability. It is invested capital 
upon which, however, we are expected to pay 
either interest or dividends. 

Those who are enthusiastic about public owner- 
ship should study these figures. There is ample 
food for reflection. Our foreign obligations are 
sacred and cannot be discharged by a wave of the 
hand and, above all, if there is any doubt as to the 
security, this capital takes wings as speedily as pos- 
sible, and the flow of new capital stops. Our pros- 
perity, therefore, depends largely upon our ability 
to secure capital absolutely against experimental 
and predatory legislation. Some of our western 
provincial governments apparently do not clearly 
realize that fact. 

In addition to our capital obligations, we have 
certain external floating liabilities varying, of 
course, from day to day. First of all, we have the 
accrued interest and dividends on capital invest- 
ments. On an average basis of three per cent., they 

9 



258 WAKE UP, CANADA! 

would amount to 150 million dollars. The bal- 
ance, that is, of our commercial liabilities to other 
countries in excess of what they owe us, is difficult 
to get at. The average trade balance against us 
does not tell the story for various reasons. When 
we add these items to our capital liabilities, we 
shall probably find that Canada's total external 
debt will not exceed by any considerable amount 
the sum of five billion dollars. 

2. 

Having examined the debit side of Canada's 
ledger, it will be interesting also to look into the 
value of those things which constitute the credit. 
From this, of course, must be deducted our esti- 
mated external liability due to borrowings by 
private or corporate enterprise, which is estimated 
at 2y 2 billion dollars and probably one billion of 
public liability. The balance will be our net 
worth as a nation. The following is the estimated 
gross national wealth of Canada: — 

Items Estimated 

present value 

Agriculture— Improved lands $2,792,229,000 

Buildings 927,548,000 

Implements 387.079,000 

Live stock 1,102.261.000 

Fishing — Total capital invested 47,143,125 

Mines— Value of buildings and plant 140,000,000 

Manufactures— Plant and working capital 2,000.000,000 

Railways 2,000,000,000 

Street railways 160,000,000 

Canals 123.000,000 

Shipping 35,000.000 

Telegraphs 10,000.000 

Telephones 95,000.000 

Real estate and buildings in cities and towns based on 

assessments of 140 localities 3.500,000,000 



A NATIONAL TRIAL BALANCE 259 

j Estimated 

ltems present value 

Clothing, furniture and personal effects 800,000,000 

Coin and bullion— Held by Receiver General 119,000,000 

Specie in banks 82,000,000 

Value of token currency 7,500,000 

Imported merchandise in store 250,000,000 

Current production— Agriculture 1,621,028,000 

Fishing 39,000,000 

Forestry 175,000,000 

Mining 190,000,000 

Manufacturing 2,400,000,000 

Total $19,002,788,125 

It is estimated, that with this investment, Canada 
earned in the way of salaries and wages, about 881 
million dollars in 1911, which, with advances that 
have since taken place, would bring the amount up 
to 1,000 millions for the year 1919, and it is esti- 
mated that the income available for living of those 
who are in business for themselves, or practising 
professions, will approach 1,200 millions, making a 
total national income of approximately 2,200 mil- 
lions per annum under present economic condi- 
tions. This is an average of about $259 per annum 
for every man, woman and child in Canada or 
$1,295 for an average family unit of five. 

It is now in order to devote a few remarks to 
the question of running expenses and resources. 
Our expenditure per head for Federal administra- 
tion, interest on debt, etc., for the year 1870 was 
$4.48, and our revenue per head was $5.55. Those 
were the days of the simple life. We had iy 2 mil- 
lion people to care for who were largely devoting 
their attention to agriculture and. gave little trou- 
ble. In 1910 we had doubled our population 
almost exactly, but our "overhead" was beginning 



260 WAKE UP, CANADA! 

to run away with us. Our expenditure per head 
had jumped to $1 1.48 and the patient taxpayer was 
contributing $14.67 per head of population. That 
year there was evidently something left over to 
reduce our public debt. Then the war came along 
and the figures immediately began to soar uncom- 
fortably. In 1917 the expenditure per head was 
$17.77 and the revenue $27.82. We had an esti- 
mated population of 8 % million people. 

Now what about the future? I am not going to 
confuse the reader with spectacular references to 
"consolidated fund," "sinking fund" or any of the 
other hocus-pocus of the counting house. We 
know that it will cost us at least 300 million dollars 
a year to run Federal Canada, pay interest on debt, 
look after pensions and pay current expenses not 
chargeable against capital account. It may, and 
probably will, cost us considerably more. This 
minimum would involve an average annual con- 
tribution per head of population of about $37. Of 
course, in addition to this, the Provinces and Muni- 
cipalities will call upon us to put up at least a 
similar amount. It would not be so bad if we 
husky males did not have to pay for the ladies, the 
babies, the minors and the unattached male drift- 
ers. If each man pays for five persons, which is 
approximately what our taxpayer will have to do, 
his Federal tax will amount to $185 per head and 
his total tax — Federal, Provincial and Municipal 
— to approximately $370 per annum. This is 
somewhat of a load. The gross per capita income 
is estimated at $259 per annum for the entire 



A NATIONAL TRIAL BALANCE 261 

population, men, women and children and the 
taxation rate for all purposes at $74 per annum. 
Our average family unit has a revenue of $1,295 
and will pay $370 in taxes, or approximately 30%. 
This, of course, includes consumption taxation. It 
will certainly cut into our income! 

3. 

It is interesting to compare these figures with the 
financial situation in Great Britain, so as to form a 
better conception of the relative magnitude of 
Canada's financial problem. Prior to the war, the 
total wealth of the United Kingdom was about 80 
billion dollars and the national income 10 billion 
dollars. It is estimated, that by this time the 
British National Debt amounts to 40% of the total 
estimated wealth of that country. Canada's Fed- 
eral debt is less than eight per cent, of her devel- 
oped resources. Decidedly, our post-war financial 
problem looks very insignificant in comparison. 
In Great Britain it is expected, that the normal 
taxation will reach 755 million pounds per annum, 
being at the rate of about $105 per capita, com- 
pared with our per capita requirements per annum 
for Federal purposes only of $37! 

It is at once conceded, that this is no time for 
self-satisfied national indolence and foolish optim- 
ism. But the worst enemy of Canada today, is the 
brooding pessimist — the blue-ruin prophet — that 
intolerable drag on national progress. Compare 
the conditions in this splendid young country of 
ours with those in war-torn, war-weary Europe. 



262 WAKE UP, CANADA! 

Realise, that in those older civilizations almost 
every natural resource has been developed and ex- 
ploited for centuries at high pressure. The soils 
have lost their virgin fertility and are coaxed to 
produce crops only by intensive culture and artifi- 
cial fertilization and at great cost. Every available 
corner of these older countries has for ages done its 
part in agricultural production. There are no new 
coal or mineral resources to be discovered and 
exploited. The creation of new wealth is limited 
by the possibility of making the human machine 
more efficient than it was before. And they cannot 
even add materially to the number of human work- 
ing units. 

Now, Mr. Pessimist, look at Canada. Do you 
know how to look at Canada with the knowing, 
appraising, intelligent eye? If you do, are you not 
amazed at her enormous, potential, natural wealth? 
The surface of her wonderful agricultural empire 
has scarcely been scratched and yet she is feeding 
millions. Her undeveloped coal, oil, power, forest 
and mineral resources defy the wildest flights of 
imagination. The wealth of the Indies fades into 
insignificance in comparison. Canada's forests and 
fisheries alone could make a nation prosperous. But, 
above all, there are the great advantages of her 
invigorating, healthy climate and clean environ- 
ments and their priceless product — the virile man 
and woman. 

Canada is an empire of boundless opportunities. 
We owe now a matter of a billion dollars or so, on 
account of the war, which we figure out at so much 



A NATIONAL TRIAL BALANCE 263 

per head of population. Very well. We can 
double our population and cut the debt in two. We 
can treble the population and have it reduced to a 
mere insignificant amount. Our safety lies in the 
outstanding fact, that we can multiply our present 
population by ten and still have ample elbow room 
and call aloud for more men and women to come 
to our shores to help us develop our resources and, 
incidentally, make happy and prosperous homes 
for themselves! 

Wake up, Industrial Canada! This is the day 
for the heroic attitude of mind. Are you in doubt 
as to the wisdom of going full speed ahead — are 
you tempted to "play safe"? Did the boys in the 
front trenches "play safe"? If they had done so, 
where would you and your precious industry be 
today? Were they pessimistic and down-hearted 
during the darkest days of the war? Mr. Indus- 
trialist, you have nothing but sordid, material 
things to lose, and it is your turn to act. Hitch 
your waggon to a star! Discard your cold, cal- 
culating caution and dispel the gloom of panic. 
Our nation is in the making at this hour and this 
is the time for great decisions. See that yours is 
dictated by a sense of public duty and patriotism 
and not solely influenced by cowardly, timid 
motives. If you meet the future with that degree 
of confidence and assurance which the whole situa- 
tion amply warrants, all will be well. 

I want to urge upon all classes in Canada at this 
moment to have done with pessimism, and to take 
up cheerfully our comparatively easy burden with 



264 WAKE UP, CANADA! 

unbounded confidence in our ability to discharge 
our obligations in full. Those who, in this vital 
period of the world's history, are privileged to live 
in this virgin land of ours may regard themselves 
as fortunate in comparison with others who must 
solve laboriously the infinitely harder problems 
facing the inhabitant of European countries, sur- 
rounded by all the limitations of older civiliza- 
tions. They have for many centuries drawn heav- 
ily against nature's ever-diminishing savings 
account, while we, in Canada, have in that bank a 
balance to our credit, the extent of which defies 
human calculation. 



CHAPTER THIRTEEN 

RAISING THE WIND 
1. 

WE are now going to discuss grave national 
affairs, with special reference to your per- 
sonal pocket-book, so I must ask the reader to pro- 
ject his mind into a dignified and receptive state. 
First, I desire to tender an apology for my flippant 
title. The fact is, however, that this is how the 
present subject crudely, but unerringly, struck my 
untutored mind. My real troubles only com- 
menced when I endeavoured to couch this central, 
dominating idea in conventional language. I had 
numerous inspirations and discarded them. After 
all, as the main business of the Government of 
Canada during the lifetime of the present genera- 
tion, and possibly for generations to come, will, 
beyond all peradventure, actually be to "raise the 
wind," by separating you from your spare cash, — 
and much cash you cannot readily spare — why not 
be brutally frank about it and "call a spade a 
spade," even if the phrase I use is somewhat slangy 
and broadly reminiscent of college days and pawn- 
brokers? At any rate, I can think of no more 
explanatory and comprehensive title, so we must 
perforce let it go at that. 

In the affairs of the nations concerned the Treas- 
ury Departments of the Governments of Great 

(265) 



266 WAKE UP, CANADA ! 

Britain and the United States loom up much more 
prominently than Canada's Finance Department. 
This, no doubt, is partly due to the fact, that the 
financial problem of this country has never been 
acute. But it is becoming so now. And the time 
has clearly arrived when our Federal Finance 
Department, and our Finance Minister, must take 
the same dominant place as in other countries. We 
do recognize, in an unofficial sort of way, that the 
portfolio of Finance comes next in importance to 
the Prime Minister, but this vague notion should 
be translated into an actuality. In all seriousness, 
the "water tight" department scheme at Ottawa 
must go, and those who obstruct the removal of the 
administrative bulkheads should go with them. We 
have reached a crisis in the history of our country 
when the closest team work becomes an absolute 
essential to the introduction of business methods in 
our administration. The Prime Minister is, of 
course, supposed to be the connecting link between 
departments, but he now moves in a sphere far 
removed from mere departmental adjustments. 
Council is a poor medium for promoting team 
work on the part of its individual members. Au- 
thorized leadership and cabinet discipline are what 
we require just now. The remedy is to clothe the 
Finance Minister with wide powers, second only 
to those of the Prime Minister, or rather to delegate 
some of the powers of the latter to the Finance 
Minister. He should be in a position to remon- 
strate with, and to dictate policy to, his colleagues, 
without apology. 



RAISING THE WIND 267 

I know precisely the sort of Finance Minister 
Canada really requires in the present crisis. He 
should possess the capacity of the present Prime 
Minister for sane, judicial reflection, Mr. Rowell's 
high sense of public duty, and the analytical, rap- 
ierlike mind of Sir George Foster, coupled with 
his parsimonious inclinations. With the inscrut- 
able face and the courageous, contemptuous dis- 
regard for public opinion of Mr. Sifton, he should 
have the broad vision of Sir Thomas White and 
the untiring industry of Mr. Calder. This com- 
posite super-Finance Minister would, of course, be 
more monster than human. He would be blind to 
everything except public interest. He would 
separate you from your last crust with a shrug of 
his shoulder. Our fiscal machine would be as 
efficient as the juggernaut, and so cordially hated 
that the people would proceed to smash it. All of 
which goes to show, that democracy hates 
efficiency. 

Until this weird creature of the imagination 
turns up and offers his services for a dollar a year, 
Canada may consider herself singularly fortunate 
in the present incumbent of this important post. 
He was not a prominent figure on the political 
horizon even a few years ago. Consequently, he 
is not steeped in unwholesome party politics. We 
may expect from him more than a partisan con- 
sideration of national problems. Sir Thomas 
White is a broad-gauge, patriotic man, not unwise 
politically, very approachable and tolerant in his 
views. There is perhaps no better human material 



268 WAKE UP, CANADA ! 

in sight in our public life for the important respon- 
sibilities of "raising the wind" in order that we 
may escape the whirlwind. 

2. 

I have endeavoured in a previous chapter to 
point out the broad, dominant features of Canada's 
present financial situation. It is clear to the least 
intelligent, that the Government will need every 
cent it can safely collect from the citizen. In other 
words, it must collect the highest practicable per- 
centage on the earnings of every individual. This 
is a tremendous responsibility. If unwisely exer- 
cised it may have all sorts of baneful influences on 
our whole productive and business fabric. Gener- 
ations ago the late Chief Justice Marshall ex- 
pressed the opinion, that the power to tax, confers 
the power to destroy. Decidedly, the most im- 
portant information the Government of Canada 
needs to-day is just how to obtain the necessary 
revenue without detrimental effects on the devel- 
opment of our country. This problem practically 
overshadows all others, and Canada will insist 
upon these functions being intelligently performed 
and the necessary organization provided to ensure, 
that every possible legitimate avenue of revenue is 
impartially utilized, while, at the same time, the 
burden is so placed and distributed, that Canada's 
industries and business suffer no avoidable check. 

Our Federal Finance Department should em- 
ploy constantly several highly paid men, trained in 
various lines of activity, to conduct a painstaking, 



RAISING THE WIND 269 

detailed investigation into every possible source of 
revenue the Government might fairly and safely 
utilize, to discover feasible sources of taxation and 
to work out all the details for incorporation in the 
budget. By studying the British fiscal proposals, 
it will be found that we have in Canada various 
sources of revenue that have not yet been tapped. 
There are great possibilities in the direction of 
luxury taxation. Those who, in a crisis like the 
present, desire to indulge in high living, should 
pay for the privilege. Think of the scope for in- 
genuity and constructive suggestion! The investi- 
gators should also be able to fortify the Minister 
with reliable facts, figures and estimates, so that he 
could face Parliament with an intelligent explana- 
tion and forecast of result of any new revenue pol- 
icy and thus avoid the danger of being faced with 
a past record of bad fiscal guesses when the House 
meets again, and his previous speeches become fair 
subjects for criticism. 

For goodness sake, let us endeavour to get out 
of the rut of brainless imitativeness and see if we 
cannot be original, be ourselves, for a change. 
Tamely copying fiscal policies of other countries 
is such a tiresome confession of stupid incapacity. 
I cannot recall, at this moment, any important plan 
of an original character, in the way of war admin- 
istration, that we worked out in Canada during the 
past strenuous years, except our system of pensions 
and of vocational training of disabled soldiers, 
which is a model of efficiency. Everything else 
was copied from other countries and generally a 



270 WAKE UP, CANADA! 

couple of years late in being put into force. Do 
let us wake up and become impressed with the 
idea, that we, in Canada, have our own peculiar 
handicaps to overcome in our own peculiar way. 
Our conditions and environments are different 
from those of other countries. Let us have intel- 
ligent investigation and constructive thought and 
solve our problems in a thoroughly Canadian way. 

3. 

Canada unquestionably has a very serious fiscal 
situation to face. It is one which calls for the im- 
mediate abandonment of all taxation proposals that 
cannot be justified on their merits. "Sugar coated" 
taxation measures, designed primarily to hoodwink 
the taxpayer and only secondarily to raise revenue 
economically, must be discarded. Our public men 
must deal with the matter openly and take the 
people into their confidence. Bricks cannot be 
made without straw, and an element of absolute 
frankness is required, to impress on all classes the 
fact that everyone, from the highest to the lowest, 
must pay according to his means. The Govern- 
ment must also give proper assurances, that in 
order to promote the more even distribution of 
wealth, the heaviest burden shall be placed on the 
shoulders of those who have the greatest stake in 
the community. 

The public must carefully guard against being 
carried off its feet by mere catch-phrases. During 
the war one heard a great deal about the "conscrip- 
tion of wealth." No one ever took the trouble care- 



RAISING THE WIND 271 

fully to analyse the term. It sounded well and we 
let it go at that. It became a very popular slogan 
at Forum meetings. Let us see what it means, if it 
means anything in particular. The term wealth, I 
presume, is intended to mean "capital." Now, the 
Government does not require capital. It needs 
income only. It needs income for the ordinary 
public services of the country, to pay interest on 
loans and to create a sinking fund to repay bor- 
rowed money over a term of years. Obviously, the 
greater the aggregate income of all the citizens, 
the greater the aggregate amount of taxes the citi- 
zens are able to pay. Therefore, the great desid- 
eratum is not to take away the capital of the citizen, 
but to promote the earning power of this capital, so 
that the State may confiscate the largest possible 
amount of these earnings. That is the basis of 
sound national finance. 

A specific case is perhaps more explanatory. A 
certain citizen owns a cattle ranch, let us say. He 
has fixed assets, in land, and liquid assets in live 
stock. If the Government levies a capital tax, of 
ten per cent, on capital, our rancher friend will 
require to sell probably twenty per cent, of his 
cattle to meet such an obligation. Evidently this 
will reduce the earning capacity of his business, as 
he still has fixed overhead expenses to meet, and 
for the future, his contributions as an annual tax- 
payer will be reduced accordingly, or may be 
eliminated entirely. The same argument holds 
good in connection with a manufacturing indus- 
try. With the withdrawal of capital, it would be 



272 WAKE UP, CANADA! 

unable to expand; in fact, it might easily fail. Let 
us not forget, that all capital is put to some use and 
cannot be withdrawn with impunity. The day of 
hoarding capital in a stocking is gone. Capital 
cannot earn income without being usefully em- 
ployed and the State absolutely cannot confiscate 
invested capital with safety. It must confine itself 
to confiscating the earnings of capital, which is pre- 
cisely what a system of income taxation is intended 
to do. 

4. 

There are many dangers assailing democracy on 
every side. One of the greatest is the demagogue 
in responsible places. His stock in trade is destruc- 
tive criticism. He plays on the ignorance of the 
multitude. The only safeguard against this menace 
is enlightened public opinion. Our public life is 
honeycombed with this class of politician, who fre- 
quently drives Governments into unwise and un- 
fair legislation, simply as a concession to popular 
clamour, based on shallow, opportunist argument. 

We have seen a beautiful example of this poison- 
ous propaganda in connection with the imposition 
of business taxation in Canada. Our present Fin- 
ance Minister is much too able a man not to realise 
the folly of such a scheme of taxation. If I am not 
mistaken, he has given veiled expression to this 
sentiment, on the floor of Parliament. But certain 
members of Parliament, and a surprisingly large 
section of the press of Canada, have hounded the 
Government into maintaining this absolutely inde- 



RAISING THE WIND 273 

fensible taxation system. I am not now referring 
to the imposition of a special tax on excess profits 
on war contract work. That is sound and legiti- 
mate. My remarks apply solely to the general tax 
on business earnings. 

The Business Profits War Tax Act, as now 
amended, provides that in the case of all businesses 
having a capital of $50,000 and over, the Govern- 
ment collects 25 per cent, of the net profits over 7 
per cent, and not exceeding 15 per cent.; 50 per 
cent, of the profits over 15 per cent, and not exceed- 
ing 20 per cent.; and 75 per cent, of the profits 
beyond 20 per cent. In all cases where a business 
has a capital of $25,000 and under $50,000, the 
Government takes 25 per cent, of all profits in 
excess of 10 per cent, on the capital employed. 
Concerns employing capital of less than $25,000 
are exempted, with the exception of those dealing 
in munitions or war supplies. As might be ex- 
pected, this legislation proved exceedingly popular 
amongst the masses. It was regarded as a thor- 
oughly "democratic" measure. The man on the 
street did not pause to reason the thing out. It 
looked well on the face of it and he was amply 
satisfied. It was a clear case of "corporation bait- 
ing." 

If we expect Canadian industry and business to 
prosper and expand, we must remove obstacles 
rather than impose them. We dare not, in fact, do 
anything that may seriously cripple industry, be- 
cause we cannot "eat our cake and still have it." 
Above everything, we must keep our hands off the 



274 WAKE UP, CANADA! 

legitimate domestic financial arrangements of our 
business institutions. Let us get the fact well into 
our heads, to begin with, that capital cannot run 
away. It cannot escape paying tribute to Caesar, 
sooner or later. 

To say to an industry: "You made a profit of 
$20,000 last year on a capital of $60,000. There- 
fore, you can afford to pay in cash to the Govern- 
ment the sum of so many thousand dollars," is 
utterly absurd. Who knows what the financial 
requirements and engagements of this particular 
industry are? What are the pressing floating lia- 
bilities that must be paid out of earnings? What 
are the future chances of heavy losses on operations 
against which cash reserves must be built up to 
enable the concern to carry on? Or what the neces- 
sity for providing a fund to take up past losses? 
What amount of cash is urgently needed to replace 
worn-out equipment or to install modern equip- 
ment to reduce cost of production? One can quite 
imagine, that an industry might appear to be mak- 
ing large earnings, but might easily be absolutely 
crippled by the withdrawal of the amount of cash 
involved under the present taxation system. 

The business tax is not, in the least, democratic. 
It is simply destructive. In our fiscal policy the 
broad principle should be laid down, that no citi- 
zen shall escape his just tax. But we must draw 
the clearest possible distinction between Smith, the 
manager, or Jones, the shareholder, and the enter- 
prise itself. Whatever Smith draws in salary or 
Jones in dividends from this concern is fairly sub- 



RAISING THE WIND 275 

ject to taxation. Tax them to the hilt, if you like, 
but don't monkey with the source from whence 
comes the income upon which we tax both Smith 
and Jones. 

Business earnings should not be subject to taxa- 
tion until they are available for distribution in 
cash, when the proper tax should promptly be de- 
ducted and remitted direct to the Government and 
the balance only paid over to the shareholder. 
There is absolutely no object whatever in business 
concerns unduly deferring the distribution of earn- 
ings. If the money is not required in the enter- 
prise as capital, it simply cannot escape taxation. 
The tax collector is always there to take the Gov- 
ernment's share whenever any distribution is made. 
Capital cannot disappear without trace from fin- 
ancial statements and accounts, and find its way sur- 
reptitiously into the shareholders' pockets merely 
by delaying the distribution of business earnings. 

5. 

I read some time ago in a Toronto weekly a most 
amusing biographical sketch of our famous Fathers 
of Confederation. All my illusions were cruelly 
shattered. They were pictured as a most mediocre 
set of men, many of them greatly addicted to the 
unwise use of alcoholic stimulants, and some with 
subsequent records that drove them from public 
life. Upon looking over the taxation provisions of 
the British North America Act, I am forced to the 
conclusion that this humourist did not wander far 
from the truth. 



276 WAKE UP, CANADA! 

In some Provinces, the individual pays three 
separate taxes on income — to the Federal and Pro- 
vincial Governments as well as to the municipality 
in which he resides. There seems to be neither rea- 
son nor method in our whole taxation scheme in 
Canada, and some quick and effective work in the 
way of constitutional amendments would seem to be 
urgently necessary. Certainly, taxation on income, 
which is bound to become the main source of 
revenue for the Federal Government, must be 
reserved absolutely for the Dominion. There can 
be no question, that intelligent legislation cannot be 
proposed on this subject unless the Government 
enjoys a monopoly on this tax. After a fair income 
tax plan has been worked out by the Federal Gov- 
ernment, and received the sanction of Parliament, 
there is at present no assurance whatever that a 
Province or municipality may not step in and levy 
additional taxes on income that will upset the 
whole equilibrium of the scheme. 

It is also reasonably clear that inheritance taxa- 
tion should be reserved exclusively for the Domin- 
ion. With our small population, we cannot risk 
increasing taxation on consumption or income, to 
the breaking point. To create a sinking fund for 
the repayment of our public debt, the rational sys- 
tem would seem to be, to impose a scientifically 
graduated Federal inheritance tax, designed so as 
in time to take up most of the principal liability, 
and to use other means of taxation for the liquida- 
tion of interest, and for consolidated fund expendi- 
ture. 



RAISING THE WIND 277 

It is realized, that such a method is open to some 
objections, the principal one being that most estates 
upon which a drastic inheritance tax would be 
levied could not pay a large proportion of cash. 
Provision could, however, readily be made for the 
State to take over stocks, bonds and other invest- 
ments at their proper valuation, so as not to impede 
the progress of industry generally, or to place any 
undue burden on an estate liable to heavy taxation. 
Shares in industrial enterprises forming part of 
such estates could readily be taken over by the Gov- 
ernment and the income collected for the benefit of 
the people of Canada. The Public Trustee in Eng- 
land administers thousands of estates there and the 
precedent was set in Canada when we provided an 
organization to deal with the administration of 
alien enemy property. Even if an inheritance tax 
on the basis of the one imposed in Great Britain 
was adopted, it would yield a very considerable 
revenue, which would increase with population 
and the prosperity of the country. 

Entirely apart from the question of revenue, a 
heavy inheritance tax is in line with advanced 
thought. It distinctly makes for a more even dis- 
tribution of wealth amongst the people. While the 
State, as at present constituted, may not materially 
interfere with the business activities of its individ- 
ual citizen during his lifetime, it cannot be success- 
fully argued, that the handing down of huge estates 
from father to son is in the interest of the latter or 
in the public interest. In fact, it is entirely con- 
trary to public interest. Civilized society cannot 



278 WAKE UP, CANADA! 

accept the principle, that the individual born into 
the lap of luxury is entitled to everything life can 
give, without individual effort. The mere accident 
of birth should not be the governing factor. Every 
citizen in the model democracy should be usefully 
employed as long as he is able to work, and should 
have no right to more than a modest portion of any 
estate left by bequest. The balance should be ap- 
propriated for public purposes, after taking suit- 
able care of minors, and female or aged depend- 
ents. 

The late Colonel Roosevelt and many illustrious 
statesmen have been firm and consistent believers 
in drastic inheritance taxation, not alone as a means 
of producing revenue for the State, but also to cor- 
rect social inequalities. It is scarcely open to doubt, 
that boys who are compelled to make their own 
way in life, after having obtained a reasonably 
good education, make better citizens in the end 
than those who, provided for through the thrift and 
exertion of others, frequently fall a victim to idle 
and vicious habits. It is quite proper and in the 
public interest, that the State should have some jur- 
isdiction over the wealth of deceased citizens. 

6. 

The high protection advocate seems at last to 
have fallen back on the revenue feature of the 
present tariff to bolster up his case, and the more 
moderate element will even admit that a revenue 
tariff has many objectionable features. But, we 
are asked, where else are we going to get our 



RAISING THE WIND 



279 



revenue? It is pointed out, that Canada has always 
depended chiefly upon consumption taxation for 
the same. From 1913 to 1918 Canada's revenue in 
millions was as follows : — 



1913 
1914 
1915 
1916 
1917 
1918 







Business 


Customs 


Excise 


Profits 


112 


2li 




1041 


2IJ 




76 


21J 




98J 


22| 




134 


24| 


124 


146 


27 


21 



Other War 
Taxes 



4 



This "where are we going to get it" idea always 
strikes me as an absolutely piffling line of argu- 
ment. We raised by taxation some 200 millions in 
1918. Three-quarters of that was collected upon 
imports. Is anyone foolish enough at this time to 
suppose, that the people of Canada did not pay that 
200 millions out of their pockets into the Federal 
Treasury? That being admitted, it is manifestly 
absurd to contend, that the people of Canada can 
only pay this amount if collected through this 
particular agency, or that they cannot pay it if an 
attempt is made to collect by improved and fairer 
methods, viz., by income taxation. I take it for 
granted, that the generation that laboured under 
the delusion that the "foreigner" pays the import 
tax, has long since died out. There cannot be any 



280 WAKE UP, CANADA! 

question that whatever amount of revenue the Gov- 
ernment is able to collect by way of taxation on 
imports can be collected with equal certainty by 
direct taxation, or through any other channel, but 
probably not with equal facility from the identical 
man who paid it before. There is the rub. 

We finally get down to the proposition, that the 
whole argument hinges on expediency, in other 
words, on politics. The following seems to be the 
case, as far as I can size it up: 

( 1 ) A direct tax involves positive knowledge on 
the part of each taxpayer of the exact amount of his 
contribution. Intelligent exemptions can, there- 
fore, be made. 

(2) An indirect tax shrouds the whole transac- 
tion in mystery. No one knows what he pays. No 
intelligent exemption can, therefore, be made. The 
system is, consequently, unsound and unscientific 
and should be avoided as far as possible. 

(3) Collecting the bulk of Canada's necessary 
revenue by means of direct taxation, therefore, 
resolves itself into a complete revision of the pres- 
ent scale of income taxation, including a lower 
exemption; all of which creates a most uncomfort- 
able political problem. 

There is no use denying, that this political prob- 
lem is a real one and even a serious one. But those 
who discuss the proposal as beyond the scope of 
practical politics, surely admit tacitly, that under 
present conditions the less affluent classes may be 
bearing an unduly heavy proportion of the burden 
of indirect taxation, without knowing it. The Gov- 



RAISING THE WIND 281 

ernment can quite consistently increase the direct 
tax and lower the exemption, if the tariff is reduced 
at the same time and the indirect burden thus 
removed in whole or in part. It would be as broad 
as it is long. Consumption taxes on luxuries can 
still be maintained, also on certain necessities as in 
the British plan, but the income, being the fairest 
basis of taxation, should assuredly be made the 
corner-stone of our taxation policy rather than 
merely incidental to the scheme. 

The latest information available is to the effect 
that some 65 million dollars will be collected dur- 
ing 1919 under the Business Profits War Tax Act, 
which is very much in excess of the estimate. Under 
the Income War Tax Act, 10 millions will be col- 
lected. This latter amount is, however, very much 
reduced, owing to no revenue being collected under 
the Income Tax Act in respect of earnings which 
have already been taxed under the former Act. 
Without this exemption, the collections would 
probably have been increased to nearly 20 million 
dollars. 

The present Finance Minister has shown cour- 
age in introducing the existing direct taxation 
measures and will doubtless realize, that his future 
course must be in the direction of increasing direct 
taxation and decreasing consumption taxes. It 
would, of course, be madness to adopt any revolu- 
tionary tactics at this time. Our income tax gather- 
ing machinery is gradually being built up and is 
daily increasing in efficiency. Records are being 
gathered and compiled, which will provide the 



282 WAKE UP, CANADA! 

statistical information so absolutely essential in 
framing intelligent policies on this subject. The 
present income tax returns will tell the story and 
will be a reliable guide to future action. 

7. 

The Great War will be directly responsible for 
many fundamental changes in our social structure. 
Even now some of them are taking definite form. 
One vital effect will unquestionably be, that the in- 
cidence of taxation all over the world will enlarge 
its scope. It will graduate from the narrow field 
of exacting more or less nominal tribute upon the 
earnings of the citizen for defraying the cost of 
public services, into the much wider and more im- 
portant sphere of becoming an effective instrument 
in promoting a more even distribution of wealth 
amongst all the citizens of a nation. The doubling 
and trebling of public revenue requirements to de- 
fray the staggering cost of war and its aftermath, 
will throw on most of the nations of the world, 
Canada included, a perpetual burden which must 
of necessity be carried chiefly by those who are best 
able to bear it, that is, by the rich and the moder- 
ately wealthy citizen. 

This situation will have a far-reaching effect. It 
will solve many social problems. Great Britain to- 
day takes by direct taxation one-third of the gross 
annual income of its fairly well-to-do citizen and a 
very large share of his entire fortune at death. Ob- 
viously, in the course of time, great fortunes will 
automatically disappear. In Canada, with our 



RAISING THE WIND 283 

smaller and less affluent population, the burden 
may have to be almost equally as great. The State 
can now perhaps afford largely to shut its eyes to 
inordinate profits on private enterprise. They must 
in the end pay tribute and the profiteer will find, 
that he has merely acted as a voluntary taxgatherer 
for the State. This will presently become an irk- 
some, unpopular and thankless pastime. It may 
perhaps safely be taken for granted, that if the 
Government of Canada does its duty intelligently, 
the scheme of taxation will be so adjusted, that net 
earnings on private capital will never be what they 
were in the past, and thus the levelling process will 
presently remove the more glaring inequalities that 
now furnish the favourite text of socialist propa- 
ganda. 

I had intended to deal somewhat at length with 
the urgent necessity that exists for thrift and eco- 
nomy, individually and nationally. But, on second 
thought, it appears almost superfluous to discuss 
that point. That most admirable of all thrift advo- 
vates, the high cost of living, will present the case 
with irresistible eloquence. The average citizen 
will also find that the new demands made by the 
State upon his normal income will probably be 
such, that a measure of economy will be absolutely 
forced upon him. Besides, Canada must largely 
finance her own capital requirements in the future. 
Patriotic appeals to provide funds for Federal pur- 
poses will be made from time to time to which the 
citizen cannot remain deaf, and which will involve 
further reduction in his current expenses to meet 
the demands of this enforced savings plan. 



284 WAKE UP, CANADA! 

It is extremely doubtful whether increased 
income from salary or investment will more than 
keep step with the cost of living. That there will 
be no relief in this quarter for a long time seems 
clear. Wages are still on the increase and raw 
materials will, consequently, be slow in the down- 
ward progress. Staples, such as wheat, may reach 
lower levels in prices, but the effect on the average 
household budget will be comparatively trifling. 
We may, therefore, safely anticipate a very high 
cost of living for many years. Reward for labour 
is also being rapidly adjusted to the new order of 
things, which latter must of necessity prevail until 
wages reach a lower level. 

Anyone who anticipates a general reduction in 
wages at any early period, will, however, be 
doomed to disappointment. The law of supply and 
demand in labour will not function efficiently in 
times such as these. Minimum hours, maximum 
pay, unemployment insurance, — all these factors 
will tend to control the situation more effectively 
than economic laws, which are gradually being 
forced into the discard by means of superior social 
organization. This has for its sole object precisely 
the elimination of the ruthless and destructive, "hit 
or miss" methods of letting matters take their 
natural course, which have perpetually precipit- 
ated the wage earner from feast into famine and 
thrown nations into periodic panics. The new 
order of things tends towards stability and is bet- 
ter for everyone. 



CHAPTER FOURTEEN 

THE FARMER AND HIS TAXES 
1. 

THE farmer presents a special problem in taxa- 
tion owing to the difficulty of ascertaining his 
net income after making reasonable allowances for 
all items properly chargeable against business oper- 
ation. It is putting it mildly to state, that the diffi- 
culty is further enhanced in Canada owing to the 
pioneer character of our agriculture and its rough- 
and-ready business methods. Then there is the not 
unnatural hesitation of Governments to impose a 
direct tax on a politically preponderating class, as 
long as they are able to levy taxation by indirect 
methods and arrive at a satisfactory net result in 
the way of revenue. One cannot help sympathiz- 
ing with the Government that finds itself con- 
fronted with the necessity of making a clean breast 
of the situation and confining its taxation system 
to direct and easily comprehended measures. 
Nevertheless, it is one of the many unpleasant 
duties that fall to the lot of our statesmen, and 
they must not endeavour to shirk it. The farmer is 
entitled to know what his taxation liability is and 
on what basis any tax is levied. He does not know 
that now. 

In Great Britain, the farmer is shown no special 
consideration. He is in the minority and takes last 

(285) 



286 WAKE UP, CANADA! 

place in point of importance. When the war broke 
out, the question of separating him from his proper 
share of the joint burden received serious thought. 
It was decided to subject him to a form of income 
taxation, which was not computed on his actual 
business income and expenditure. He was assessed 
on a basis of one-third of the rental value of his 
land. In a country like Great Britain this amount 
is, of course, easily ascertained. Farms of a smaller 
area than 450 acres were entirely exempt. This 
was very generous treatment. Far-seeing states- 
men realized that prosperous agriculture meant 
vastly more to the nation than a few million pounds 
of taxes. Provision was even made under which a 
special reduction was secured if the actual profits 
of any particular farm fell below the statutory 
estimate of one-third the rental value. It is inter- 
esting to note, that it was deemed to be in the public 
interest to make the taxation burden upon agri- 
culture as light as possible. 

It was only when Great Britain's war expendi- 
ture developed into the colossal proportions of the 
last two years and when profits on agricultural pro- 
ducts mounted up to phenomenal figures that the 
Government there began to increase rural taxa- 
tion. In 1917-18 the assessment basis was increased 
to the full rental value of the land and the 1918- 
19 basis is twice the rental value of the land. The 
farmer, however, is exempt from the operation of 
the Excess Profits Duty. The gross production of 
British farmers increased from 200 million pounds 
before the war to approximately twice that figure 



THE FARMER AND HIS TAXES 287 

for the current year. It is estimated that the capital 
of the farmers in Great Britain has been doubled 
during the period of the war. This will mean 
increased production in the future. Perhaps that 
will not be good for Canada! 

2. 

Speaking by and large, the tariff reform move- 
ment is essentially one that comes from the land. 
The farmers of Canada, constituting fifty-six per 
cent, of the population, have spoken formally on 
the subject in no uncertain voice. As might be 
expected, the metropolitan press of our country, 
while in many instances professing sympathy with 
the agrarian view, has not been slow in pointing 
out, that revenue is the crux of the situation and 
that any agitation in favour of a reform that would 
at once reduce the public revenues by at least fifty 
per cent., must, in common fairness, be accom- 
panied by some sort of suggestion as to how the 
financial situation is to be adequately met. 

The Canadian farmer has unfortunately failed 
in this respect to some extent and has apparently 
been ill-advised and unintelligently led. His class 
already enjoyed the unenviable reputation of being 
utterly selfish, narrow and devoid of public spirit. 
The sarcastic comments in the daily press on his 
latest venture into the fiscal field have not had a 
tendency to correct this impression. In fact, it is 
now firmly rooted in the minds of urban dwellers. 
The farmers' tariff reform movement is frankly 
regarded by them as a selfish attempt on the part 



288 WAKE UP, CANADA! 

of the largest class of producers in Canada to shift 
the burden of taxation from their own shoulders to 
those of the already overtaxed town and city dwel- 
lers. This is an unfortunate, and, I believe, quite 
erroneous, conception of the situation. 

The farmers, as a matter of fact, have steadily 
and consistently urged the adoption of the Single 
Tax system in Canada. Under it, there would be 
no possibility of their escaping taxation. It is only 
fair that this part of their platform should be con- 
sidered in conjunction with their tariff reform 
attitude. I have elsewhere somewhat severely 
criticized the single tax proposal, but there are 
unquestionably features of it that can be profitably 
adopted. A tax on agricultural lands labours, of 
course, under all the objectionable features inci- 
dental to every form of taxation of capital values, 
one of which is, that there can be no certainty that 
the property assessed has actually produced suffi- 
cient revenue to the owner to justify the tax levied, 
which I deem to be a departure from sound prin- 
ciples of taxation. At the same time, the question 
of expediency cannot be entirely ignored. Every- 
thing considered, a straight land tax is, from an 
administrative point of view, perhaps the most 
practical solution of our rural taxation problem. 
It is certainly infinitely sounder than our present 
stupid consumption taxation. 

As I have pointed out, the farmer, from a tax- 
gathering point of view, unquestionably presents a 
problem. What his present contribution is under 
the import tariff system of collecting revenue no 



THE FARMER AND HIS TAXES 289 

one knows and no one can even estimate. While 
no definite figures are available on the subject, it is 
fairly certain, that collections under the income tax 
law now in force, from farmers throughout Can- 
ada, will be inconsiderable. Our Finance Depart- 
ment has in all probability regarded the situation 
as more or less hopeless and has not perhaps even 
made a very serious study of methods to bring the 
average farmer successfully within the operation 
of this tax. 

Obviously, it is a most difficult matter to analyze 
the income and expenditure of the farmer so that a 
proper basis may be reached for levying income 
tax. In the first place, only few farmers keep 
books, or even simple records of their business 
transactions, and most of them, if asked to fill in 
forms giving information of the status of their 
business, would be quite unable to do so. The 
farmer receives part of his living from his business. 
The value of this would have to be determined and 
it is seldom on record. Altogether, it would be an 
almost impossible task to collect taxes from the 
farm on an actual income basis. This, however, be 
it clearly understood, is not the fault of the farmer. 

It seems to me, that the single-tax principle 
might effectively be applied in collecting from the 
farm the volume of taxation deemed necessary in 
lieu of income tax. It would be necessary to con- 
sider the farmer entirely apart from the regular 
operation of the income tax and then adjust the 
import tariff accordingly. Having estimated the 
additional amount to be collected from Canadian 
10 



290 WAKE UP, CANADA! 

farms, simply make a levy on all agricultural 
lands in Canada of so much per acre. We have 
110 million acres of land embraced in farms 
throughout Canada. There is also a vast area of 
unoccupied lands. In the three prairie provinces 
alone there are over 200 million acres of surveyed 
lands. Indian Reserves, roads, forest reserves, 
water-covered areas, etc., account for approxi- 
mately 80 million acres. The balance apparently, 
is now or will be in time, available for taxation. 
Why neglect such an obviously simple avenue of 
taxation, particularly when the Government has, 
in season and out of season, been invited and urged 
to use it by the responsible leaders of the very peo- 
ple affected? The amount per acre involved 
would be inconsiderable and the cost of collection 
small. 

3. 

In working out a land tax system applicable to 
agriculture in Canada, the whole subject would 
have to be approached with circumspection. It is 
not a job for amateurs. Knowledge of the peculiar 
agricultural conditions of each province would 
have to be brought to bear in the construction of 
any legislation on the subject. This tax, being in 
effect a tax on capital, could not be blindly levied 
without a certain detriment to agriculture. 

Exemption provisions would have to be care- 
fully drafted. A reasonable exemption period 
would need to be given new settlers before the Act 
became operative in their cases. The possibility 



THE FARMER AND HIS TAXES 291 

of extended crop failures would have to be con- 
templated and provided for by conferring power 
on the Governor-in-Council to postpone the col- 
lection of land taxes within any area so affected. 
Above all, the character of lands embraced in 
farms would need to be classified roughly, at least, 
if full justice were to be done to each holder. It is 
obvious, that stony or swampy areas could not 
fairly be taxed on the same basis as lands capable 
of yielding expensive and remunerative crops. The 
tax would probably also have to be graduated 
according to average land value in each province, 
and possibly with reference to distance from rail- 
way transportation and markets. 

I do not propose to enter into all the detail of the 
proposal. It is not my special mission here. That 
a fair and workable rural taxation system, coupled 
with an economical plan of administration and col- 
lection, can be worked out along the lines indi- 
cated, admits of no serious doubt whatever. I am 
also fully convinced, that this is the only rational 
agricultural taxation system to adopt in Canada, 
and it has the additional virtue of being absolutely 
in line with the views and convictions of organized 
agriculture. That the Canadian farmer must be 
compelled to bear directly a fair share of the com- 
mon burden admits of no argument whatever. The 
problems are, to determine the amount of his con- 
tribution and to distribute the burden fairly. 



CHAPTER FIFTEEN 

RURAL CREDIT 
1. 

IT may seem quite inappropriate to deal with 
the banking system of Canada here, but as my 
criticism will be largely confined to the subject of 
agricultural banking facilities its inclusion will 
be understood. We have been told by our leading 
financial men that our banking system is the best 
in the world. It probably is — for the banks. It 
may be also for industry and commerce. That it 
was specially designed to meet the requirements of 
the latter is clear. From the point of view of 
agriculture, it leaves much to be desired. 

Our whole system of enormously large financial 
corporations, with branches scattered all over 
Canada, does not lend itself successfully to busi- 
ness with the farmer, for the simple reason, that 
the banking risk involved in agricultural loans can- 
not be estimated on the basis that applies in con- 
nection with commercial loans. Once a farmer 
has made his start and purchased his plant, he has 
invested his entire capital in fixed assets and in 
some cases has considerable liabilities attached to 
them. Individual loaning in such a case would 
be considered reckless banking. The farmer with 
sufficient liquid assets to command a loan is pre- 
cisely the farmer who probably does not need it. 

(292) 



RURAL CREDIT 293 

The real assets of the average farmer, compelled 
to use the bank, are of course, the fixed and moral 
assets — the fact, that he has a large equity in his 
land, even though it may be mortgaged, that he 
has a wife and children and has taken root in his 
own soil, that he has lived in the district for years 
and bears a good character. These assets, however, 
are seldom considered by the average chartered 
bank, and from a business point of view, one can- 
not criticize. It is the system that falls short. 

The business of the chartered bank is to lend 
against unpledged liquid assets, taking security in 
certain cases. Useful amendments have been made 
to the Act in recent years to enable banks to lend 
to farmers against definite security. The exemp- 
tion provisions, however, make farm loans a haz- 
ardous risk. I am inclined to think, that the var- 
ious Provincial Governments might in conference 
with delegates from agricultural organizations, ad- 
vantageously reconsider the exemptions granted 
farmers. Altogether, this class of business can- 
not be satisfactorily handled through the pres- 
ent organization of our banks and the machinery 
now available. The very practice of sending quite 
young men out as managers of branches in rural 
districts and after a brief interval transferring 
them elsewhere by way of promotion, is not cal- 
culated to bring the farmer and his bank repre- 
sentative into very intimate relations. They hardly 
get to know each other before a new manager 
arrives and the process of establishing confidential 
contact has to be begun all over again. Besides, 



294 WAKE UP, CANADA! 

these young men have little authority except in 
regard to trifling loans and are continually under 
the iron rod of the head office. 

2. 

Some bank managers have freely told me, that 
the more rigidly the farmer adheres to working on 
his own capital and refrains from borrowing, the 
more likely he is to succeed. This is a short- 
sighted view. Numerous British Royal Commis- 
sions have visited Denmark during recent years to 
study the system and method of financial co-opera- 
tion so successfully practised there. I have in 
mind one Commission that condemned the whole 
Danish system unstintingly, on the ground that the 
average debt of the farmer there was the greatest 
per capita of any agricultural country in Europe, 
or probably in the world. This argument, how- 
ever, was successfully refuted by a leading eco- 
nomist, who pointed out, that the facility with 
which the Danish farmer could command capital, 
both short term and long term, at a low rate of 
interest, was precisely the fundamental reason for 
the unprecedented agricultural prosperity of that 
country. This is the other side of the question and 
I commend it to consideration. 

The fact is, as I personally know, that some of 
the leading Danish farmers would never dream of 
paying off the large mortgages they carry on their 
properties. The money is obtained at a low rate 
of interest and they calculate, that they can profit- 
ably utilize this additional capital in the conduct 



RURAL CREDIT 295 

of their business, which, owing to the large amount 
of artificial fertilizer and imported feeding stuffs 
they buy, is, of course, much more complicated 
than the business of agriculture in Canada. 

Moreover I conceive it to be a dangerous theory 
to assume that a farmer cannot utilize capital as 
advantageously and as satisfactorily as a person 
engaged in any other business. I believe, on the 
contrary, that he can make far more profitable use 
of money than any other borrowing class. The 
widest possible credit, at the lowest rate of interest, 
is an essential in agricultural development. Where 
these conditions prevail, agriculture prospers. 

We are exceedingly short of live stock in Can- 
ada. There are many causes assigned for this 
situation, which appears somewhat paradoxical to 
the man from the city or town, who has not lived 
close to the soil. He attributes it to a studied 
neglect on the part of the farmer in respect of one 
branch of his business, which infallibly would 
lead to unqualified success if once he could be per- 
suaded to try it. This, of course, may be at once 
dismissed as an absolutely absurd proposition. The 
cases that would come under this heading would 
be so negligible as to be unworthy of serious con- 
sideration. We must therefore assume that there 
are certain very real obstacles to the general intro- 
duction of live stock on our farms. And such is 
precisely the case. 

It is altogether a question of capital. The 
farmer must purchase foundation stock, provide 
certain buildings, grow additional fodder crops, 



296 WAKE UP, CANADA! 

etc. How are we going to solve it? Not by any 
sort of educational propaganda, technical or com- 
mercial. That live stock on the farm is a desirable 
proposition, no one disputes. It is self-evident. 
If there is any immediate solution in sight it lies 
in the extension of rural credit. And if we can 
persuade ourselves mentally to couple the prob- 
lem of generous rural credit, as a Government 
measure, with the problem of live stock extension, 
we shall have made a long stride towards a better 
understanding of the whole matter. 

I do not feel disposed to complain of the gen- 
eral attitude of the chartered bank towards de- 
mands for funds by farmers desiring to invest in 
live stock. Our chartered banks will stoutly main- 
tain, that any farmer entitled to credit has no diffi- 
culty whatever in securing what accommodation 
he is worthy of. I believe that this statement is 
literally correct. It is entirely a case of definition 
and standards. The very farmer who most urgently 
requires generous credits is ineligible, or only 
partly eligible, according to the standard of our 
chartered bank. Nor have I any intention to dis- 
pute the soundness of the bank standard or the bank 
point of view on the subject. My criticism is ex- 
clusively confined to the absence in Canada of a 
banking organization specially designed to meeting 
agricultural requirements in a new country. 

Another difficulty is, that present bank advances 
are of too temporary a nature. Our banks are 
great sticklers for "liquid" assets. A farm loan 
may be made for three months and renewed on 



RURAL CREDIT 297 

maturity. But difficulties are raised by the Head 
Office when renewals are too frequently requested. 
The policy is, that the bank must be repaid, at 
least, within the year. The whole transaction 
is a temporary one, which is not what the farmer 
wants. He cannot profitably invest in live stock 
knowing that he has to realize within a year. It 
is not worth while for a farmer to borrow on 
such conditions for live stock investment. The 
attitude of the chartered bank is, that it cannot 
undertake to supply permanent capital to its cus- 
tomers. Its mission is to supplement temporarily 
their working capital. As regards industry and 
commerce, that is quite an unassailable position. 
The farmer, however, can be only partly bene- 
fitted by such a limited measure of financial 
assistance. 

3. 

In the United States the country's financial busi- 
ness is based on local "State" and "National" 
banks. The owner of the small bank most fre- 
quently manages the business. He is generally a 
leading man in the community and knows every 
farmer in the district personally. Two or more 
such banks, frequently with a capital as low as 
$50,000, compete for business in most rural cen- 
tres. With the recent establishment of great 
regional banks, every facility now exists for re- 
discounting of farmers' paper, so that a large loan- 
ing business can actually be done on comparatively 
small capital. The moral asset is, of course, the 



298 WAKE UP, CANADA! 

keystone of loaning to farmers by these institutions, 
and the interest rate is generally high, although 
seldom higher than in our West. The system is 
well adapted for the requirements of a new agri- 
cultural country, but I think Canada might evolve 
something better; possibly on the co-operative 
plan. 

The Government of the United States has, how- 
ever, within the past few years, given very consid- 
erable attention to the question of providing 
machinery for extended loans to farmers on real 
estate security at low rates of interest. After a very 
searching investigation into the rural credit sys- 
tems of various countries throughout the world, 
legislation was brought in, under which a Federal 
Farm Loan Bureau was established to arrange 
long term credits. The Federal Farm Loan Act 
will enable farmers throughout the United States 
to borrow any sum from $100 up to $10,000 at from 
five to forty year periods. The basis adopted in 
fixing rates is to advance up to 50% of the land 
value and up to 20% of the value of the permanent, 
insured improvements on the land. 

The United States Government is organizing 
twelve great land banks whose operations will 
extend over the whole of the United States. It is 
expected, that this system will have the effect of 
enabling tenant farmers with limited capital to 
become land owners. In the United States, as else- 
where, there is a very sympathetic feeling towards 
promoting the instinctive and deep-rooted gratifi- 
cation derived from the ownership of land. Loans 



RURAL CREDIT 299 

are made on the amortization plan. If made for 
36 years, for instance, the annual interest plus \% 
will extinguish the debt in the time mentioned. It 
was expected that the rate would not be higher 
than 5%, but the effect of the war on world finance 
has been such, that it is quite unlikely that this 
hope will be realized, or at least, not for the time 
being. It is also expected, that the effect of Fed- 
eral loaning at a low rate of interest and on very 
long terms, will enable the farmers requiring 
working capital to raise a further amount by bor- 
rowing against second mortgages. Financial con- 
cerns in the United States have expressed them- 
selves as favourable to such a development. 



In the Dominion of New Zealand the problem 
seems to have been satisfactorily solved. After a 
complete investigation of European agricultural 
credit-systems by a commission, that colony came 
to the conclusion that a plan to furnish cheap 
money to farmers came well within the scope of 
practical politics. It was realized there, that no 
private concern or corporation could loan money 
to farmers for a sufficiently long period, and at a 
sufficiently low rate of interest, to enable him to 
meet his interest and principal payments from the 
earnings of the farm and, at the same time, to take 
care of his living expenses and necessary improve- 
ments. It was felt, that the repayment of loans to 
private enterprise would often be made by farmers 
at a sacrifice. The people of New Zealand 



300 WAKE UP, CANADA! 

thought, that it was most desirable to enable their 
rural population to surround themselves with com- 
forts and conveniences that would make life on the 
land specially attractive, all of which required 
moderate capital. In 1894, legislation was passed 
by the Parliament of New Zealand, entitled "Ad- 
vances to Settlers Act." Capital was raised in 
Europe on Government guaranteed bonds and 
loaned to farmers through a chain of "Advances 
to Settlers Offices.' 7 This organization was con- 
templated under the Act. In 20 years, over 
seventy million dollars was loaned on this basis, 
the rate of interest being 1% over the actual cost 
of the money to the Government, which was to 
cover working expenses and flotation charges, also 
to create a reserve fund. Nearly two million dol- 
lars now stands to the credit of this fund. The sys- 
tem is not on a co-operative basis inasmuch as each 
borrower is only responsible for his own liability. 
The 1% feature, however, provides against losses. 
So far there have only been 35 foreclosures under 
this Act; no losses whatever have been sustained, 
and the actual cost of the administration has been 
reasonable. 

It is interesting to study the result of this rural 
credit system. When it went into effect the per 
capita value of domestic products exported an- 
nually from New Zealand amounted to approxi- 
mately $30, while in 1912 they had risen to 
$111.78, which was then supposed to be the high- 
est of any country in the world. The number of 
savings-accounts and amount to their credit are also 



RURAL CREDIT 301 

reputed to be the largest in the world in propor- 
tion to population. The whole agricultural situa- 
tion in New Zealand has been transformed. The 
farmers have built good houses and have put large 
areas of land under cultivation. Live stock devel- 
opment has received a tremendous impetus and the 
introduction of modern sanitary equipment on 
New Zealand farms is now almost universal. 

5. 

In Canada we have made spasmodic efforts to 
deal with this problem. The Province of British 
Columbia has provided very advanced legislation 
on the subject of long-term credits. Unfortu- 
nately, the war situation has had an adverse effect 
on the working-out of the scheme. The Province 
of Manitoba has also made a notable contribution 
to the subject and has loaned some $2,000,000 
under their Act. The Province of Alberta has 
likewise provided legislation, which it is now 
rumoured is being recast and improved. All this, 
however, is merely begging the question. What is 
required is a thorough Federal investigation of the 
whole subject, not so much with reference to the 
rural credit systems of other countries, but with a 
very complete understanding of the particular 
problems that confront us in the Dominion of 
Canada. Legislation in this matter should then be 
passed by the Federal Government, based on co- 
operative effort with the Provinces. It is clear 
that the Dominion Government can borrow more 
advantageously in the world's market than the 



302 WAKE UP, CANADA! 

Provinces, which would mean cheaper money to 
the farmer without any additional expense to any- 
one. The whole subject should be dealt with in a 
statesmanlike manner and with a clear compre- 
hension of its tremendous importance to the agri- 
cultural advancement of Canada. 



CHAPTER SIXTEEN 

THE MAN ON THE LAND 
1. 

IN dealing with the vital subject of agriculture 
in Canada, I experience the refreshing feeling 
of being on very familiar ground. There is, how- 
ever, so much that might profitably be said and so 
little space available, that my main difficulty seems 
to be to decide what to leave unsaid. I am not 
going to inflict on my readers a tiresome lecture 
on Canadian agriculture. It would be out of place 
in this volume. I am rather inclined to confine my 
observations to a consideration of the farmers' 
place in the scheme of things, and shall endeavour 
so to present his case, that his views may receive 
sympathetic and understanding support at the 
hands of urbanites. 

I wish I had the power to impress the reader 
profoundly with the all-important idea, that 
successful agriculture is the only sound foundation 
upon which a newer and better Canada may, in 
course of time, be built. I do not wish to assert, 
that agriculture is the foundation of the wealth and 
greatness of all countries, although many students 
of political economy adhere to this belief and I 
could perhaps myself produce reasonable argu- 
ments in support thereof. It is sufficient for my 

(303) 



304 WAKE UP, CANADA! 

purposes if I can make it clear, that it is so, at least, 
as far as Canada is concerned. 

The agricultural resources of Canada defy, in 
point of potential wealth, all effort of imagination 
or comprehension. This statement is literally true. 
Our present agricultural production is a mere drop 
in the proverbial bucket, in comparison with our 
future possibilities. The value of United States 
farms, equipment and stock is roughly SO billions 
of dollars. The farmers of that country sold an- 
nually prior to the war, dairy products to the value 
of some 600 millions; poultry products, 250 mil- 
lions; wool, 66 millions; domestic animals, 1,600 
millions, and farm crops, six billions. The total 
of these items alone runs into eight and a half 
billions. 

The following is Canada's agricultural produc- 
tion for the years 1915 to 1917. This official 
estimate represents the gross value only. 

1915 1916 1917 

Field crops $825,371,000 $886,495,000 $1,144,637,000 

Farm animals : 

Horses exported .... 1,842,000 4,701,000 4,385,000 

Beef cattle, 20 p.c. of 
estimated total value 30,500,000 41,300,000 54,119,000 

Sheep, 20 p.c. of esti- 
mated total value.. 3,262,000 4,200,000 7,115.000 

Swine : Number, plus 
16 p.c. for animals 
born and slaughter- 
ed within the year, 
125 lb. meat per 
animal (1915, SV 2 
cents per lb. ; 1916, 
12 cents per lb. ; 
1917, 17.33 cents per 

lb.) 38,354,000 60,000,000 90.950,000 

Wool : 12 million lbs., 28 

cents, 1915 ; 37 cents, 

1916; 59 cents, 1917.. 3,360,000 4,440,000 7,000,000 



THE MAN ON THE LAND 305 

1915 1916 1917 

Factory cheese and 

creamery butter ..... 51,482,000 62,479,000 74,487,000 

Dairy butter : Quantity 

estimated on basis of 

Census, 1911 ; price, 25 

cents per lb. in 1915; 

27 cents per lb. in 

1916; 30 cents per lb. 

in 1917 45,000,000 47,000,000 103,072,000 

Home-made cheese : 

Quantity estimated on 

basis of Census of 

1911 ; price, 15 cents 

per lb. in 1915; 18 

cents per lb. in 1916. 278,000 351,000 263.000 

Whole milk : Quantity 

estimated in Census 

Report of August 23, 

1917; price at 6 cents 

per quart, 1915 and 

1916; 7.5 cents per 

quart, 1917 49,245,000 42,986,000 55,000,000 

Fruits and vegetables, sav 35,000,000 35,000,000 40,000,000 

Poultry and eggs, say . . 35,000,000 35,000,000 40,000,000 

Gross total value.. $1,118,694,000 $1,223,952,000 $1,621,028,000 

Prior to the war Canada's total industrial pro- 
duction, including all the products of our mines 
and forests, was approximately a billion dollars. 
Study the above record of what agriculture has 
done, draw the comparison between industrial and 
agricultural production, then take a swift look at 
the future and realize the significance of this fact: 
— In the three prairie provinces alone, Canada has 
an agricultural area greater than one half of the 
total agricultural area of the entire United States! 

Try to visualize what it all means — what stupen- 
dous potential wealth liesi dormant in those black 
acres west of Lake Superior. Remember, too, that 
this land has scarcely any ©qual in point of produc- 
tiveness and lasting qualities. How small Can- 



306 WAKE UP, CANADA! 

ada's vast war-debt looks, beside a season's possible 
production of this area! And do not lose sight of 
what all this ultimately means to the industrial 
development of Canada, if the goose that lays the 
golden egg is not killed by misguided efforts. 

How, in the face of these facts, can any sane per- 
son discuss Canada's future development as pre- 
senting any serious problem, beyond her agricul- 
ture? That stands first. With its solution, minor 
problems are automatically solved. Conflicting 
interests dwindle into absolute insignificance from 
this standpoint, and we must bend our energies to 
making Canada prosperous along the path that 
nature has so clearly indicated. We must all get 
down to bed-rock and think in terms of agriculture. 



When the boy approaches the end of his school 
career, his father, if he is a prudent, sensible man, 
will ask him: "What are you going to be?" By 
that time he will probably have shown a distinct 
aptitude or preference for some special profession 
or occupation. A youth who drifts from one occu- 
pation to another seldom develops into a creditable 
and successful citizen. Likewise, it is well for a 
virgin country, to take stock of itself in good time. 
Nations, like individuals, must select their occupa- 
tions. The question must be answered: "What are 
you going to be?" Your statesmen must answer for 
you and determine whether your desires can be 
realized, and put you in the way of attaining your 
ambition. Canada now, is at the parting of the 



THE MAN ON THE LAND 307 

ways. What is our leading industry going to be? 
This must be determined, once and for all time. 

Switzerland and Italy are frankly concerned 
chiefly with attracting tourist traffic. They are 
the great holiday countries of Europe. The legis- 
lation and administration of these countries is 
shaped to attract well-to-do people, on pleasure 
bent. On the other hand, Denmark, Holland, New 
Zealand, Australia and many other countries sim- 
ilarly situated, realize, that agriculture and live 
stock production must always be their chief indus- 
tries. No stone is left unturned to promote, in 
every legitimate way, the admitted primary indus- 
try. Other countries, possessing limited agricul- 
tural areas, but with abundance of raw material, 
build up great industrial systems to keep their 
populations profitably employed. Countries like 
Russia and the United States are of so enormous 
an extent, of so varied climates, and so rich in both 
agricultural lands and raw materials, that they are, 
or will be, almost self-contained. 

It is a fair comment, that the human being is not 
placed on earth merely to truck and trade and 
cheat. We surely cannot be wholly materialistic. 
Canada's ideal might well be to promote a happy 
and contented agricultural population, even at the 
sacrifice of certain more or less artificial indus- 
tries which we have been endeavouring to nurse 
into active and profitable existence, ever since the 
days of Confederation. Let us ask ourselves in all 
seriousness whether it is worth while to run the 
risk of strangling our agriculture for the sake of 



308 WAKE UP, CANADA! 

these industrial weaklings adopted by the State. 
Let us rest absolutely assured, that we cannot have 
it both ways. If the farmer is to be deprived of 
his best markets and has to divert his hard-earned 
profits to subsidize industry, he cannot prosper. 
We must make our choice. 



Just as a mere matter of interesting speculation, 
does it not seem paradoxical, that Canada, which 
has been so abundantly blessed with agricultural 
wealth, should deliberately set about to create in 
this fresh new country the very conditions from 
which the European has fled in terror and disgust? 
Are we to conclude, that there can be no human 
happiness without unsightly chimneys, belching 
forth their poisonous smoke? Do we enjoy the 
•spectacle of streams of pale, toilworn humanity, 
wending their weary way into the slums and tene- 
ments apparently inseparable from this much 
vaunted industrial development? Is it worth the 
price of destroyed agriculture? Have we become 
such abject worshippers of the golden calf that we 
are ready to sacrifice everything that makes nations 
sound and great? Other countries have found it 
possible to become reasonably prosperous and con- 
tented on a basis of agricultural production. Such 
industries as naturally come into existence where- 
ever agriculture is prosperous will automatically 
follow. 

Fifty-six per cent, of Canada's population makes 
its living directly from the soil. A large percent- 



THE MAN ON THE LAND 309 

age of the production of the other basic industries, 
mining, lumbering and fishing, is also absorbed by 
the farm. Out of the total value of our manufac- 
tured articles in 1915, a fairly normal year, less 
than one-third went into our external trade. Half 
a million people found employment in these indus- 
tries. Four million people lived directly off the 
farm. Heaven only knows how many indirectly 
gained their livelihood off this enormously pre- 
ponderating section of the community. It is surely 
well within the mark to assert, that at least 90 per 
cent, of the population of Canada, be they engaged 
in trade, industry, transportation or in any other 
line of human endeavour, depend absolutely on 
our agriculture for their daily bread and the pros- 
perity of their undertakings. 

The point I want to impress upon the mind of 
the reader, is the outstanding economic importance 
of agriculture in Canada. I want to make it clear, 
that Canada's prosperity depends entirely on a 
prosperous agricultural population. Consequently, 
sacrifices can safely be made by the general com- 
munity to assist agriculture, while undue burdens 
on agriculture should not be tolerated for a 
moment. These are points which our public men 
must keep constantly in mind. Without these 
guiding principles in administration, Canada will 
remain in her present rut. 

In Canada, as elsewhere, the really influential 
citizen lives in town. In Canada, as elsewhere, 
the most appalling ignorance of rural affairs pre- 
vails amongst our urbanites. Once these good 



310 WAKE UP, CANADA! 

people could be brought to understand and sym- 
pathize with the man on the land, a new era would 
dawn. The education of our urban dweller, there- 
fore, I regard as one of our great problems, requir- 
ing urgent attention. 

4. 

Just prior to the war we had a striking object 
lesson in Canada upon the economic effect of a 
languishing agriculture. It apparently created no 
lasting impression upon the public mind. In 1914 
Canada was, beyond all doubt, drifting with the 
tide towards a veritable precipice. A widespread 
financial panic was impending, which might have 
swept into oblivion many financial, industrial and 
commercial enterprises in Eastern Canada. It 
would, like an avalanche, have gathered greater 
and greater force on its destructive path. Who 
can say where it would have ended? 

Almost at the psychological moment, the great 
European war broke out and to it was conveniently 
attributed the gathering clouds on the domestic 
horizon. Our captain of industry or financial mag- 
nate, when in confidential mood, will now readily 
admit, that the war was only a contributory cause, 
which, however, in the end became our financial 
salvation. Exigencies of war enabled us promptly 
to do many high-handed things to save the situa- 
tion which otherwise could never have been justi- 
fied, such as declaring general moratoria, facilitat- 
ing drastic retrenchments, absorbing surplus work- 
ers in our military forces and adopting many other 



THE MAN ON THE LAND 311 

extraordinary heroic remedies to save us from the 
soup kitchen and widespread liquidation and in- 
solvency. Then came the turn of the tide ushering 
in war orders, high prices, increased agricultural 
and industrial production and rapidly mounting 
exports. In a twinkling almost, we sailed into the 
smooth waters of sleek, opulent prosperity. 

What were the causes that had brought Canada 
to the very brink of panic in 1914? It is of national 
importance that we should dissect and locate them, 
although I am aware, that we do not talk about 
these unpleasant matters in polite society nowa- 
days. The recollection of what might have been 
is a groteque nightmare which we would fain con- 
sign to the inner-most recesses of our memory. Why 
deliberately rattle the bones of our family skele- 
ton? But, dear reader, it is good for the soul to 
bring it out of the dark cupboard into broad day- 
light and examine it closely. It has a lesson of 
vast significance for Canada. It would assuredly 
tell us, if it could, that a multitude of our Canadian 
business houses and industries were tottering 
drunkenly in 1914 owing to the simple and sordid 
fact, that they could not collect their outstanding 
accounts in Western Canada because, speaking 
generally and vulgarly, the Western farmer was 
"dead broke" and could not, therefore, pay his bills 
amounting in the aggregate to many millions of 
dollars. World prices for his products had been 
depressed for some considerable time and, to cap 
the climax, he had had a succession of disastrous 
crops. 



312 WAKE UP, CANADA! 

Homesteaders who were able to do so had aban- 
doned their farms or were getting ready to give up 
the fight. Immigration had ceased in sympathy 
with the unfavourable agricultural prospects. 
Farming was on "the toboggan." New settlers who 
had purchased land could not meet their deferred 
payments. The crazy townsite, land, oil and other 
"booms," nourished largely on outside capital and 
engineered by outside gamblers, had collapsed in- 
gloriously. Centres of population and the more 
recently settled farming districts were becoming 
depopulated and almost every emigrant left undis- 
charged liabilities behind him. Western towns and 
cities were making frantic efforts to stave off receiv- 
erships at the instance of bondholders, and our 
banks were becoming decidedly nervous and were 
calling in loans wholesale. It is a ghastly retros- 
pect, but now, at the height of our prosperity, is an 
appropriate moment to remember it all. Then 
came the outbreak of war, a bumper crop in 1915, 
high prices for wheat and live stock — and the West 
was off again on the high road of prosperity carry- 
ing industrial Canada along! 

The Canadian farmer has now enjoyed a few 
years of prosperity and has been able to discharge 
his debts — which he always does when he can. He 
is able to buy more freely and eastern industry and 
business, consequently, are flourishing. It is cur- 
ious how persistently our minds are focussed upon 
the present to the utter exclusion of the unpleasant 
past and all its lessons. We were, presumably, func- 
tioning under normal conditions in Canada until 






THE MAN ON THE LAND 313 

1915. We have been, and probably shall be, func- 
tioning abnormally from that time until about 
1920, when we may expect to become normal 
again. We have seen what "normal" meant up to 
1915. Are we going to court a repetition of such a 
state of affairs? Or will the majority of our lead- 
ing men frankly acknowledge that, in the light of 
past events, there can be no prosperity in Canada 
that does not have its genesis in the soil of our coun- 
try? Shall we cease sneering at the farmer when 
he gives expression to his well-founded anxiety 
about the uncertain future, and perhaps makes re- 
construction proposals that may not appear strictly 
orthodox? Rest assured, that the situation does not 
call for supercilious criticism or offensive imputa- 
tions. Every thoughtful and patriotic citizen, irre- 
spective of trade, profession or political affiliation, 
will be well advised to study the real difficulties 
confronting this country and to contribute his quota 
towards the solution of the many vital problems 
that surround agriculture, in the east as well as in 
the west. 

We cannot, of course, control wind and weather 
and ensure favourable crop conditions. That is in 
other hands. But we can, if we will, do much to 
ensure that when the farmer has anything to sell 
he shall get it to market in good condition and at 
reasonable cost, that profitable markets shall not 
be artificially closed to him, that, in fact, the 
returns from his business shall be such that he can 
survive the lean years and thus keep the wheels of 
industry moving steadily to the everlasting advan- 



314 WAKE UP, CANADA! 

tage of everyone who calls Canada his home. It is 
not a class question. It is our one, great national 
problem. We might easily have had four to five 
million people west of Lake Superior by this time, 
with a corresponding industrial development east 
of the Great Lakes. They are not there because, 
since Confederation, we have administered that 
western empire as a great Canadian estate under 
absentee ownership. We have had majority rule 
in Canada with a vengeance! 



Agriculture may well be termed "the great 
gamble." The farmer's occupation involves a life 
of unremitting toil. He must compete in the open 
markets of the world with farmers of other coun- 
tries and climates — the black, the brown, the yel- 
low and the white races who have been working at 
high pressure for centuries and will probably go 
on doing so for many more generations. Take it 
one year with another, our farmer makes a fair 
living and nothing more. And, besides, he has con- 
siderable capital invested in his business, on which 
he draws only a very moderate return. He is at 
the mercy of the capriciousness of the seasons. 
Nothing he can do will enable him altogether to 
forecast results. Neither can he fix the values of 
his products. If the season is good in Russia or 
the Argentine or India, the Canadian farmer must 
sell his wheat at a discount. The cost of producing 
it does not enter into the calculation at all. He 
comes into the game, but other people play the 
cards. 



THE MAN ON THE LAND 315 

I strongly entertain the opinion, that there are 
many, many small farmers in Canada to-day, who 
would gladly exchange their present uncertain 
occupation for that of the railway man or other 
unionized employee, with his short and regular 
hours, his certain pay, absence of business worry, 
and freedom from that continual pressure for 
further capital investment, which absorbs every 
hard earned cent the farmer contrives to set aside 
in good years, and makes his life a burden in 
bad ones. The demands of his business for more 
and more capital investment also effectually pre- 
vent his enjoying the ordinary modern improve- 
ments and home comforts that almost every town- 
dweller would consider absolute essentials in life. 
If the farmer is doubtful on this point, just ask his 
wife. She has studied the deadly parallel and 
appreciates the differences between her daily life 
and that of her sister in town, as far as physical 
ease, comforts and recreations are concerned. 

The farmer is the willing, sweating beast of 
burden of modern society. Politically, he is a 
nonentity. He has scarcely yet learned the art of 
team work. Socially, the town dweller is inclined 
to regard him as inferior. Economically, he foots 
the bill for the whole nation. He is the founda- 
tion, everybody admits, and like the literal founda- 
tion, he carries the entire dead-weight of the whole 
structure. He is the national paymaster-general. 
Men and masters in the cities may fight and squab- 
ble over pay and over hours and over principles, 
but when the settlement is finally made, it is the 



316 WAKE UP, CANADA! 

farmer, the greatest ultimate consumer of manu- 
factured goods and of transportation, who foots the 
bill, because he cannot pass the burden on to any 
one else. 

6. 

The high cost of living is a safe topic of con- 
versation these days. It holds everybody's interest 
and attention. As usual, Farmer Hodge bears the 
brunt of the criticism. How frequently one hears 
an argument end with the profound observation : 
"The farmers must all be getting wealthy." A 
standard weekly household budget has been 
worked out by the Dominion Department ot 
Labour in connection with cost of living investiga- 
tions. In the last month of the year 1918 the weekly 
average amounted to approximately $26.35 for a 
family of five. This cost was distributed as fol- 
lows: Rent, $4.85; Clothing, $4.90; Fuel and light- 
ing, $3.06; Meat and meat products, $4.24; Bread 
and flour, $1.87; Groceries, $3.10, and produce 
generally supplied direct from the farm, $4.33. 
We might safely add another $5.00 for drugs, doc- 
tor and miscellaneous expenses, which would run 
the budget over $30 out of which the farmer re- 
ceives directly a maximum of $4.33 and, indirectly, 
a mere fraction of the meat and bread expenditure. 
Our city consumers should study this statement and 
revise their views. 

But is the farmer getting wealthy? He is un- 
doubtedly much better off than he was some years 
ago, by reason of higher prices for his products, 



THE MAN ON THE LAND 317 

which are not quite offset by higher cost of labour 
and of general operations, which constitute a very 
considerable item. But it is important that the 
layman shall understand the situation. Professor 
Leitch recently made a farm survey of Oxford 
County, Ontario. He assumes this area to be 
fairly representative of the province. He found 
that 450 Oxford dairy-farmers, investigated by him 
earned on an average, a little below $1,200 per 
annum as a result of about 13 hours work per day 
for seven days a week, and also including the work 
of their wives and younger children. These fig- 
ures are absolutely vouched for and are based on 
painstaking inquiry on the ground. So much for 
Eastern Canada. 

As far as the West is concerned, I fortunately 
have actual figures from one of our large Western 
farms, of which I am part owner and, therefore, 
can vouch for the correctness of my information. 
Very exact cost records have been kept in connec- 
tion with this enterprise ever since its inception. 
We operate on 4,000 acres and have been in busi- 
ness since 1912. Our gross operating cost increased 
from $14,252 in 1913 to $31,572 in 1917 on prac- 
tically the same area. We produced about 39,000 
bushels of wheat in the former year at a cost of 37 
cents a bushel and, under the same management, 
42,000 bushels in 1917 at a cost of 83 cents a bushel. 
In 1918 owing to crop failure the cost was, of 
course, abnormal and a fair comparison cannot, 
therefore, be established. For the benefit of those 
who are interested, I may mention, that in 1918 our 



318 WAKE UP, CANADA! 

expenses were $22,000 for which we practically 
received no return whatever. Our operating prac- 
tice is very similar to that of the average farm and 
may be accepted as a fair indication of the volume 
of increase in general cost of farm operation in 
Western Canada. 

There is, however, another aspect of the cost of 
living grievance worthy of serious consideration. 
The late J. J. Hill summed the case up as the "cost 
of high living." He was a famous coiner of epi- 
grams. The town consumer now is bemoaning his 
fate and looking longingly back to the days when 
a hundred dollars a month was equivalent to de- 
cent comfort. That period may fitly be catalogued 
as the days of the "high cost of low living!" Can- 
ada has paid an extravagant price in postponed 
and arrested national development for the halcyon 
days of ten cent eggs and butter, twelve cent poul- 
try, fifty cent wheat and apples at a dollar a barrel, 
all of which spelled white slavery on the farm, 
unmitigated serfdom. With prematurely broken- 
down men and women, who never knew what re- 
creation, decent comfort and household conveni- 
ences meant. We paid the price also in farms 
abandoned by the old people, in utter despair, fol- 
lowing the rush cityward of all the young farm 
men and women, who wisely concluded, that the 
worst the city had to offer in the way of drudgery, 
low pay and indifferent living surroundings, was 
vastly superior almost to the best the farm could do 
for them. Even under those wretched conditions, 
some farmers made money. One is never permitted 



THE MAN ON THE LAND 319 

to forget that! But it was generally accomplished 
by practising abject penury, which made the 
farmer of that day a by-word, and at a cost in sweat 
and blood that the present generation would scorn 
to emulate. And it is well they should. 

I strongly entertain the hope that happier days 
are now in store for the man on the land. He has 
of late years received a reward for his work, that 
will presently enable him to put more brains and 
less brawn into his effort. He will be able to enjoy 
the comforts of modern conveniences in his home 
and an occasional holiday. The moderate price 
motor-car and the rural telephone are banishing 
isolation. His social standing will be improved 
and the farm will offer sufficient inducements to 
the young people to anchor them to rural life. In 
fact, everything points to the regeneration of agri- 
culture. These improved conditions will finally 
be reflected in the industrial life of the nation. The 
farmer will be a better customer for manufactured 
products than hitherto, and Canada will gradually 
approach a much sounder and more normal indus- 
trial development than we have enjoyed up to the 
present. 

Decidedly, Canada cannot afford to pay much 
less for agricultural products than the present 
scale. Let us level up to that rather than attempt 
to reduce it. Let us also study and simplify our 
intricate and expensive system of distribution, so 
that the farmers' produce will reach the consumer 
without the intervention of many unnecessary mid- 
dlemen. There, in my judgment, lies the chief 



320 WAKE UP, CANADA! 

and legitimate grievance of the consumer today. 
But the consumer is himself responsible for the 
high cost of many food products. The general 
demand for highly refined package goods, whose 
intrinsic food value in comparison to price is 
absurdly small and whose popularity rests on noth- 
ing more substantial than striking labels, expensive 
containers and forced publicity, is a fruitful source 
of unprofitable expense; also the abuse of retail 
delivery and of credit, the outgrowths of our mod- 
ern "house-keeping-by-telephone" system. Let us 
not wish it all on the farmer! 

7. 

I realize I have drawn a pretty dismal-looking 
picture of the farmers' life, and my intimate 
friends will smile incredulously, having in mind 
my own successful agricultural enterprises. These, 
however, are conducted on a large scale and backed 
by ample capital and are not in any way representa- 
tive of average farming. I refer here to the 
ordinary small farmer in the East and to the man 
who loads his wife and babies and household goods 
on a wagon and goes out on the prairie to battle 
against nature. There are, however, compensa- 
tions. The farmer makes wealth for himself and 
the State without levying toll on his fellow-man. 
His is altogether a beneficial and humane occupa- 
tion, a blessing to all, a curse to none. He works 
in partnership with God Almighty and, if he does 
not prosper in the worldly sense as greatly as men 
in other occupations, his compensating advantages 



THE MAN ON THE LAND 321 

lie in the simple, healthful and independent life. 
With the great poet, Longfellow, we may well 

say: — 

"Happy he whom neither wealth nor fashion 
Nor the march of the encroaching city 

Drives an exile 
From the hearth of his ancestral homestead." 

No nation can attain greatness, nor remain 
great, without a steady influx into the hives of 
commerce and industry of the red blood from the 
farm. The national importance of promoting a 
prosperous rural life cannot be overestimated. Sir 
H. Rider Haggard says, on this subject: 

. . . . I will go further, and repeat what I have said 
before in other books — for it is one of the great objects of 
my life to advance this truth for the consideration of my 
fellow-countrymen — that the retention of the people on the 
land should be the great, and even the main, endeavour of 
the Western nations. Nothing can make up for the losts 
of them — no wealth, no splendour, no 'foreign investments,' 
no temporary success or glories of any kind. At any sacri- 
fice, at any cost, all wise statesmen should labour to attain 
this end. The flocking of the land-born to the cities is the 
writing on the wall of our civilizations. This I have seen 
clearly for many years, and if I needed further evidence 
of its truth, I found it in plenty during my recent researches 
into the social work of the Salvation Army, which brought 
me into contact with thousands of waste mankind — the 
human refuse of the towns. 

Speaking generally, in the villages such folk scarcely 
exist. But in the cities, whither so many flock in faith and 
hope, they are manufactured by the hundred. For most 
of these the competition is too fierce. They are incom- 
petent to cope with the difficulties of what is called high 
civilization. At the first touch of misfortune, of tempta- 
tion, of sickness, they go down, and but too often fall, like 
Lucifer, to rise no more. The shelters, the jails, the hos- 
pitals, the workhouses, the Poor Law returns, all tell the 
11 



322 WAKE UP, CANADA! 

same story. Moreover, what class of people are bred in 
the slums of Glasgow or of London? Yes, in Glasgow, 
where I was informed not long ago that one out of every 
twelve of the inhabitants has no home, but sleeps at night 
in some refuge or common lodging-house. . . . 

There has been in Canada a noticeable tendency 
on the part of our rural people to flock to the 
towns and cities. In 1901, according to census 
figures, 37^% of our population lived in the 
towns. Ten years afterwards the proportion was 
45^4%. This is not a healthy development, but 
the cause is perfectly clear. Agriculture has, as 
previously stated, not been sufficiently attractive. 
There has not been enough profit in it and the 
present conditions of farm life will not stand com- 
parison with town life. That is the case in a nut- 
shell. Our young people know it and have left 
the farm. The main trouble undoubtedly has been, 
that there is more "easy money" in the towns and 
the "bright lights" are attractive. 

8. 

What are we going to do to correct this admit- 
tedly serious state of affairs, to attain and preserve 
a healthy balance of population? There is no 
single thing that can be done which will accom- 
plish this. There are many things that could, and 
should, be done, some of which have been dealt 
with elsewhere in this volume. Broadly speak- 
ing, the remedies lie in the towns rather than on 
the farms. This, of course, sounds like rank 
heresy. I can picture 1 in my mind's eye our sue- 



THE MAN ON THE LAND 323 

cessful business-man, ponderously rising to his feet, 
deep indignation stamped upon his features. He 
is about to reiterate the conventional arguments 
slating roundly our slovenly farming, the imple- 
ments unprotected against wind and weather, the 
burning of strawstacks, the persistent production 
of cereals to the detriment of animal production 
and so on and so forth ad nauseam. 

I have often thought, that it is a most extraor- 
dinary thing that a man of business will, with the 
utmost sang-froid, criticize farm management and 
policy, when he would stand aghast if his hayseed 
brother assumed a similar attitude with regard to 
his business. Everybody welcomes an intelligent 
interest in rural affairs on the part of our town 
people. That is what I am pleading for. But it 
must not be dictatorial, nor must it assume, as a 
starting point, that all farmers are fools. There 
is no business or art practised anywhere requiring 
wider technical skill and knowledge. The farmer 
is part capitalist, part manager, part mechanic, 
part scientist and part labourer. He cannot be ex- 
pected to know it all, from browbeating a stupid or 
timid bank manager to exercising the function of 
midwife to the cow with the crumpled horn. Let 
us be tolerant. He could probably make a much 
better fist at running the bank, than the bank man- 
ager could at running the farm. 

Nevertheless, there is a tremendous opportunity 
for education along scientific and technical lines, 
among our Canadian farmers, just as there is in 
connection with industry and commerce in our 



324 WAKE UP, CANADA! 

towns. The rural problem, however, is much more 
difficult. We have now in Canada, with a little 
improvement here and there, all the facilities, Fed- 
eral and Provincial, for imparting theoretical and 
practical agricultural instruction and information 
to our farmers. We are, in fact, not far from 
being splendidly equipped. The unfortunate side 
of it all is, that the average farmer makes little use 
of it. Everyone who has had experience in con- 
veying instruction to rural communities will agree. 
A few enthusiasts in each community, too often not 
the most solid and practical element, can always be 
counted on at farmers' meetings, but our real prob- 
lem lies in bringing the farmer to the fountain of 
knowledge. Our agricultural instructional system 
is like the church — there is spiritual consolation 
for all, but comparatively few seek it. Our system 
is perhaps too self-centred. Our officials are too 
anxious to embody their conclusions in elaborate 
reports, which nobody reads, and are not suffi- 
ciently alive to using the press, nor perhaps suffi- 
ciently skilled in reducing their information to 
readable limits. Our whole scheme of agricultural 
publicity, Federal and Provincial, needs overhaul- 
ing very badly. 

9. 

As I have said, it behooves every Canadian to 
be intelligently interested in the welfare of the 
"man on the land." A true realization of the fact, 
that their interests are mutual, and an honest en- 
deavour to understand his problems and handi- 



THE MAN ON THE LAND 325 

caps, and to create a well-informed public opinion 
on the subject of rural affairs, would be a tremen- 
dous step forward in Canada and would be enor- 
mously helpful towards solving many of the im- 
portant general problems that face us all at the 
present time. 

In dealing with the question of an improved 
and extended agriculture in Canada it is important 
to avoid the pitfalls into which so many writers 
fall who deal with the subject purely on a theoreti- 
cal basis. Innumerable reports have been made on 
agricultural conditions and practices in other coun- 
tries and unfavourable comparisons are drawn 
when applying these object lessons to the agricul- 
ture of Canada, particularly to that of the West. 
The farmer is held up to the public gaze as an 
unprogressive "hayseed." If he would only adopt 
the system of Great Britain, Holland or Denmark 
all would be well! What he wants is more 
"science," more "brains"! Eloquent orators pic- 
ture an agricultural Utopia in Canada, a new era, 
if only our farmers would heed the plain lessons 
taught the world by the farmers of some distant 
country. 

It is of prime importance to realize, that object 
lessons and inspiration in agriculture can seldom 
be drawn from other countries, even where the 
climatic conditions are fairly similar. The con- 
trolling factor in agriculture in all countries is 
markets. In Great Britain the farmer is over- 
whelmed with the same sort of good advice that is 
gratuitously given the Canadian farmer. He is 



326 WAKE UP, CANADA! 

told that it is an everlasting reflection upon his 
management, that so much butter should be im- 
ported into the tight little island from Denmark, 
Siberia and other countries. These well-inten- 
tioned mentors entirely overlook the fact, that the 
British farmer has a much superior market for 
his milk and cream, in the enormous cities and in- 
dustrial centres that have sprung up during the 
past century, than he could obtain by converting 
this commodity into butter and cheese. 

We are asked here why our Western farmer 
grows so much wheat to the exclusion of other pro- 
ducts, notably those of the dairy. The explanation 
is perfectly simple to those who understand. He 
is merely following the line of least resistance as 
we all do. Wheat pays fairly well, comparatively 
speaking, on our new lands. It involves less hand 
labour than other branches of farming, because a 
greater proportion of the work is mechanical. 
Grain is essentially, naturally, and logically, the 
first crop off new land and gives the quickest 
return. It takes less capital to produce than any 
other crop. Several other reasons could be given, 
but one more is perhaps sufficient, and it is this: 
the mere fact that wheat is being so largely pro- 
duced is fairly good evidence, that it pays better 
than other crops in our present state of national 
development. This should be wholly convincing, 
unless we are to accept the theory, that our wheat 
growers are lunatics or wholly incompetent, which 
is hardly safe. 

Besides, with the present scarcity of competent 



THE MAN ON THE LAND 327 

labour, who would undertake the heavy respon- 
sibilities of the dairy farm either in the West or in 
the East? Men simply will not work the long 
hours, — Saturdays, Sundays, holidays — incidental 
to this branch of farming, as long as they can get 
work, at the same pay, with Union hours, in the 
towns. Can you blame them? In the end, the 
farmer's wife has to take over the job, and trudge 
to the cow-stable in the slush and snow, bucket in 
hand, and milk cows by the light of a lantern, 
morning and night. When you pay 75c a pound 
for butter, you dainty, pink and white, altogether 
charming city women, think of that! 

10. 

A few observations on the agricultural labour 
situation confronting us, may be timely. Let us 
have a good look at this problem. The organiza- 
tion of all classes of labour is proceeding apace. 
Even the lower classes of unskilled labour now 
have their own organizations, which undertake to 
bargain for and regulate hours of labour and rate 
of pay. In New Zealand and Australia, agricul- 
tural labour has been organized for years along 
very rigid lines. Compare the lot of agricultural 
labour in Canada with the organized labour of 
the cities and what do we find? 

The hod carrier appears at his job at 8 a.m. and 
works until 5 p.m. with an hour off at noon. On 
Saturday he quits at noon and has a rest period 
until Monday morning. His home, however hum- 
ble it may be, has the usual modern conveniences. 



328 WAKE UP, CANADA! 

He is able to associate with his fellows and enjoy 
all the attractions of the city, including the movies. 
His wages are generally adequate to the extent of 
enabling him to live and dress decently. His 
organization sees to that. 

The farmhand rises from his slumbers at 5 a.m. 
and does his chores. He has his breakfast at 6.30. 
His team goes out to work at 7 a.m.; more chores 
at noon ; steady work until 6 p.m. ; then supper and 
more chores. When the day ends he has probably 
worked from 14 to 16 hours. He frequently sleeps 
in a loft. He has very inadequate facilities for 
keeping himself clean and in a great many instances 
he lives in a mess that his city brother would not 
put up with for a minute. He tumbles to bed, dead 
tired, when the day's work is done. By compari- 
son, it is the life of a serf. No recreation, no time 
for self-improvement, whilst his wages are prob- 
ably much inferior to what the city labourer is able 
to command. 

To argue that competent farm labour is not 
entitled to the same remuneration as a hod carrier, 
is the rankest kind of nonsense. A competent farm 
hand, able to look properly after live stock and do 
ordinary farm work, is a much more skilled man 
than even the carpenter or bricklayer receiving 
five to seven dollars a day. How long will these 
conditions prevail? When will the agricultural 
labourer demand, first, equal wages with city 
labour and, secondly, a bonus to compensate him 
for his isolation and inferior living conditions? 
And when that time comes, what will the Cana- 



THE MAN ON THE LAND 329 

dian farmer do? In his present circumstances, he 
cannot meet those demands and live. He cannot 
pass the burden on to the consumer. 

11. 

I notice in the press a message to the farmers of 
Canada from the Rt. Hon. Mr. Prothero, for 
whose judgment I have tremendous respect. It is 
to the effect that we should develop our chilled 
meat trade. This, of course, involves the finishing 
in Canada of our beef and mutton, which we 
should be able to do more cheaply than it could be 
done in Great Britain. We must hope for better 
things, but in the past, it has not perhaps been a 
particularly attractive business. 

The profits in live stock feeding may be divided 
into the direct and indirect. The indirect returns 
are obvious. The farmer gets the manure to keep 
up the fertility of the land. By feeding them at 
home, he saves hauling his various field crops to 
market. He is able to employ labour all the year 
round instead of only for the summer season. Cat- 
tle feeding in Great Britain is practically down to 
a basis where the feeder only expects to get a fair 
price for the feeding materials raised on his farm, 
and his money back for those he has actually pur- 
chased, and to take his profits out entirely in the 
shape of indirect returns, principally, of course, 
the manure. Even in the United States, east of 
the Mississippi River, the feeding industry is very 
frequently conducted on a similar basis. Where 
hogs follow steers, their market value may repre- 



330 WAKE UP, CANADA! 

sent a by-product profit. I have often wondered 
how our Canadian manufacturers would like to 
conduct business on such a margin? Fancy, ask- 
ing them to take their sole profit in the shavings 
and iron filings of the shop! 

In any other line of manufacture or production 
of any sort, it is a commonly accepted axiom, that 
the performance of each operation required to 
bring any commodity to its finished state, is pro- 
perly rewarded according to the amount of outlay, 
time and skill involved. Not so in live stock feed- 
ing, however. The cost of raw material, labour 
and value of the finished product bear no neces- 
sary relation to each other whatever. As usual, 
the farmer has to be the gambler and bear all risk. 
No business man would entertain a proposition 
like that, for a minute. The gamble frequently is, 
as to whether or not he gets his money back as well 
as his indirect profit. And then he has to run the 
risk of disease, accident and fluctuating markets. 

Are such market conditions satisfactory? The 
United States feeder replies in the negative, and a 
study of pre-war price statistics certainly bears out 
his contention. In Western Canada, owing to the 
lower price of grain, we generally do expect a 
direct return on feeding, but even here the margin, 
prior to the outbreak of the war, was so small that 
our risk was not compensated for and, as years go 
by, the margin may become narrower than ever. 
This is the situation confronting our feeders and 
farmers generally, that we should like to see cleared 
up, as far, at least, as it can be cleared up. It is 



THE MAN ON THE LAND 331 

freely stated amongst cattle feeders in the U.S., 
that if they have many more years like 1914 and 
1915, the cattle-feeder will be looking about for 
someone to feed him! 

12. 

Canadian farmers demand free trade with the 
United States in cereals and animal products. They 
recognize that admission to the markets of that 
country for their products is absolutely essential. 
This is unquestionably the chief issue. At the 
present moment, Canadian agricultural products 
reach the United States free of duty. That was the 
work of a democratic congress. What the present 
republican congress will do in this matter remains 
to be seen. It may re-enact the provisions of the 
Dingley tariff. 

Otherwise well-informed people often wonder 
why our West has been so slow in developing. 
Those who have personally assisted in this disap- 
pointing process entertain no illusions on that sub- 
ject. It is clear as daylight. Until the Dingley 
tariff was repealed a few years ago, practically 
every head of cattle, sheep or hog, every fleece of 
wool, every hide, in fact, every animal product of 
the West was handicapped in seeking an outside 
market. The price realized on every item of such 
products was precisely twenty-seven and a half 
per cent, less than its proper selling price. Or, to 
put the case another way, the market value was 
fixed in Chicago and it cost us 27j4% to get in 
there. The market in Canada was based on the 
Chicago price, less the duty. 



332 WAKE UP, CANADA! 

On the other hand, on every tool and implement 
the Western farmer bought, and on his clothing, 
boots and various other items entering into his 
daily living and work, he had to pay about the 
same amount of duty, directly or indirectly. He 
was penalized coming and going. 

So we find, that John Smith, farmer or rancher, 
who, in the days of the Dingley tariff, ranged his 
live stock in the Sweet Grass Hills, just north of 
the International Boundary in Alberta, sold his 
$50 steer for approximately $36.25, while John 
Jones, who ranged his cattle a mile or so away, but 
south of the magical line, was able to get the full 
value. And in addition the fortunate Jones was 
able to purchase his haying machinery at 15% to 
20% less than his Canadian neighbour. Is it any 
wonder that agricultural development was slow in 
Western Canada? 

For years I had wool to sell in the West. The 
same wool that to-day brings the flockmaster 68c 
per pound, I have sold at 7c a pound! We have 
about two million sheep in Canada. Our total 
clip is about 12 million pounds of wool per annum. 
The Canadian demand is, and always has been, 
far beyond the home production. The Canadian 
buyers paid the usual market price in Bradford, 
England, for the surplus they required. The cost 
of the imported wool laid down in Canada was, 
of course, very much higher than what these same 
mills, or their agents or representatives, paid for 
the wools in the West. This state of affairs only 
lasted until the Wilson tariff law went into effect 



THE MAN ON THE LAND 333 

and we were given free admission for our wool 
into the United States. This at once improved the 
situation from the Western standpoint, for with 
the U.S. buyer in the field the Canadian market 
was not the only one available and our wools ad- 
vanced 2iy 2 % at once. This criminal attitude of 
the Canadian mill owners apparently brought its 
own punishment in the end. They made the blun- 
der of depressing prices far below what "the traffic 
would bear." Hence our depleted sheep stocks to- 
day, all over Canada, and Canadian mills are 
now forced to pay a premium for foreign wool. 

I cannot resist introducing a personal experi- 
ence, which tells the story better than statistics. 
The year before the Dingley tariff was repealed 
and while Canadian wool growers were still com- 
pelled to sell at the prices dictated by a small 
group of protected pirates, my concern had a clip 
of 50,000 lbs. of wool to dispose of. We decided 
we would not be held up. We sent to New South 
Wales for a wool press and bales, secured the ser- 
vices of a New Zealand wool sorter and classifier, 
erected a very primitive wool scouring plant on 
our property, hand-scoured our wool and turned it 
out according to the best Australian traditions and 
shipped it to the London market. 

I went to England and saw the shipment sold. 
It created some sensation and realized within a 
fraction of the highest price reached at the Sep- 
tember sales, in competition with wool from every 
country in the world. Our Canadian buyers that 
year had the satisfaction of finally paying the full 



334 WAKE UP, CANADA! 

price and probably bringing this wool back across 
the Atlantic into the bargain. We actually did 
better, after paying all these unusual expenses, 
than had we accepted the best offer at home. These 
are the problems the Canadian farmer has had to 
face and solve, — if he could. He hates tariffs and 
with good reason. 

13. 

Present market conditions for animal products 
are, of course, quite satisfactory to the farmer. The 
repeal of the Dingley tariff opened up the United 
States market barely in time to save our West. 
Then came the war and war-prices. The latter 
situation is obviously an abnormal development. 
It is not, by any means, safe to settle down to the 
comfortable conviction that we shall have un- 
hampered entry into the United States for our 
agricultural products forever. As is the case in all 
protected countries, the tariff south of the line is 
simply a political football. With the republican 
party in power in the United States again, the 
pressure to restore the tariff on agricultural pro- 
ducts there is going to be very strong. I should not 
care to predict the effect west of Lake Superior, 
should such an eventuality occur. It might shake 
Canadian Confederation to its very foundation. 
Some years ago land in the west was cheaper than 
it is now and stockmen were able to run their herds 
and flocks on the public domain without cost. 
That day is pretty well over and a larger capital 
investment in land is now required in connection 



THE MAN ON THE LAND 335 

with animal husbandry. The economic conditions 
are not what they were, and never will be again. 
The farmers of Western Canada would not tamely 
submit to utter destruction, which would be the 
inevitable result of exclusion from the markets of 
the United States, under present conditions. These, 
I realise, are serious conclusions. I appeal to all 
Canadians to study the situation sympathetically. 



CHAPTER SEVENTEEN 

THE RETURNED SOLDIER AND MATTERS MILITARY 

1. 

CANADA has, even in her most prosperous 
periods, her seasonal unemployment problem 
incidental to all countries with climatic extremes. 
No safe conclusions can, therefore, be based on the 
state of the labour market during the off season as 
to the ability of the country to absorb the large 
number of men returning from the front. They 
are not, fortunately, in dire need of immediate 
employment and will probably be absorbed almost 
as fast as they are ready to take up civil occupations 
again. 

Canada's debt to the men who went overseas to 
take part in the great crusade against autocracy, 
can never be adequately expressed in terms of mere 
dollars and cents, which means — that no Govern- 
ment can satisfactorily liquidate Canada's moral 
liability by act of Parliament. It reduces itself to 
an obligation between man and man. It becomes, 
in the truest sense, a debt of honour by the man 
who stayed behind to the man who bravely em- 
barked upon the great crusade. This concep- 
tion of the case every patriotic employer in Canada 
must have engraved indelibly upon his mind. He 
— personally, individually — is responsible for the 
welfare of one or more of those who are returning 

(336) 



THE RETURNED SOLDIER 337 

without any definite prospect of employment. 
With a general and complete realisation of this 
obligation on the part of Canadian employers, the 
re-establishment problem solves itself. 

But the returned soldier also has grave respon- 
sibilities resting upon him. He went "over there" 
as a sacred duty. He did not offer his body and 
soul for sale for a paltry dollar-and-ten a day and 
the prospect of a pension if disabled. He now rep- 
resents all that is finest and best and noblest in our 
national life. It is for the rest of us to endeavour 
to live up to his standard in the future. We look 
to him for example and guidance. He has wan- 
dered through the valley of the shadow of death 
and has unconsciously imbibed wisdom, tolerance 
and higher aims from the very source of the foun- 
tain of life. Canada feels, that in this period of 
widespread social stress and turmoil she may safely 
depend upon her "boys" to exert a steadying influ- 
ence on the more unstable and less responsible ele- 
ments in her population and, that she may con- 
fidently anticipate their loyal and public-spirited 
assistance in the process of rearing — perhaps all 
too slowly and laboriously for many of us — a 
democracy for which no citizen need blush. The 
Canadian soldier created a high standard for him- 
self overseas. In spite of the unwarranted appre- 
hensions of the croaking pessimist, Canada be- 
lieves, that he will live up to — and even beyond — 
this standard, in his civil capacity. 



338 WAKE UP, CANADA! 



Canada is to-day confronted with a problem of 
great magnitude and importance. The war is over 
and our men are returning. It is supposed that the 
soldier, having spent some years in the war zone 
or under training, almost entirely in the open air, 
and engaged upon activities absolutely different 
from his previous civil occupation, will find it 
distasteful to work in the counting-house, shop or 
factory. Others argue, that having wallowed in 
mud and wet, day after day, and night after night, 
he will be tired of the soil and will be glad enough 
of an indoor occupation. There is reason in both 
assertions. It will probably be found, that his 
first inclination may be to favour the indoor work, 
but after a while, and if economic and employ- 
ment conditions are difficult, he will feel the call 
of the fresh air and the independent occupation 
which the land offers. It is, therefore, to be hoped 
that any plan contemplating the settlement of the 
returned soldier on the land will remain open to 
him for a sufficient length of time to permit him 
to try civil employment and enable him to get his 
bearings. 

The Dominion Government, with commendable 
promptness, made provision early in the war, tor a 
scheme of soldiers' settlement and later appointed 
a small commission to work out details. The broad 
features of the scheme were outlined in the Sol- 
diers' Settlement Act. Briefly, the intending mili- 
tary settler looks over the country and selects a 



THE RETURNED SOLDIER 339 

homestead or a parcel of land for purchase. He is 
then advanced a sum of money as a loan, at a fairly- 
low rate of interest and repayable in twenty years. 
He doubtless fills in and signs many forms, receives 
the blessings of a paternal Government or Board 
and then embarks on the great adventure. To the 
unsophisticated this plan will doubtless look very 
attractive at first sight. It relieves the Govern- 
ment of a tremendous amount of administration 
and responsibility. The settler -is absolutely on 
his individual resources and the paternal atmos- 
phere is absent. 

Let it at once be admitted, that colonization 
effort, under the most advantageous conditions, is, 
as a rule, a heart-breaking and thankless task. The 
road of the colonizer, be it a Government, a cor- 
poration or an individual, is beset with many and 
varied difficulties, some of them quite beyond con- 
trol. But let it also be realized, that in this partic- 
ular instance, Canada has a duty to perform, that 
should not be shirked, or based on following the 
lines of least resistance. The returned soldier who 
goes on the land, is entitled to a fair run for his 
time and effort. And as a contribution towards the 
solution of Canada's great problem of coloniza- 
tion, the country has a right to expect that the pro- 
posed undertaking shall rest on sound and business- 
like principles and not be considered solely from 
the point of view of eliminating political trouble. 
If this job is worth doing at all, it is worth doing 
well. 

There is another phase of the matter which 



340 WAKE UP, CANADA! 

merits the most serious consideration. Canada has 
recently fallen heir to an enormous railway sys- 
tem. These lines to-day present a financial and 
colonisation problem rather than an operating 
problem. Having in view the enormous interest 
of the Government in this property, entirely apart 
from any obligation toward the returned soldier, 
almost any reasonable colonization expenditure 
would be amply justified. The fact that thousands 
of returned soldiers will want to settle on land in 
Western Canada might, therefore, be regarded by 
the Government as a happy opportunity to secure 
settlers for territory tributary to its railway system. 
Fortunes have been spent on unsuccessful colon- 
ization projects, and the success of the Govern- 
ment undertaking will, of course, depend entirely 
on its ability to profit by past mistakes. A great 
step will have been gained if the Government ap- 
proaches this task with a clear realization of the 
many serious difficulties in the way of the success- 
ful settlement of people on the land. In its very 
nature, assisted colonization is a dangerous task 
for a Government to undertake. The final verdict 
of success is unavailable for perhaps 8 or 10 years. 
In the meanwhile, criticism is rampant, and visible 
evidence of apparent failure frequently complete. 
It is also true, that the governing factor in success 
is seldom the soundness of the project itself, nor 
its administration. There are two elements lead- 
ing to failure, that defy absolutely both sound con- 
ception and efficient administration, viz.: (a) A 
succession of bad crops following initial settle- 
ment, (b) The human element. 



THE RETURNED SOLDIER 341 



Successful colonization essentially depends 
upon the resourcefulness of the individual. It in- 
volves a continual fight against obstacles and 
adversity. The successful settler is the man who 
has developed the ability to overcome these 
obstacles. Such a man would succeed under al- 
most any hardships. Consequently, the success of 
any scheme of assisted colonization will depend 
largely on how successfully the Government is 
able to eliminate the paternal element, while exer- 
cising sufficiently close supervision over the set- 
tlers' welfare and operations, and preserving the 
Government's investment. Unquestionably, the 
greatest danger the Government could encounter 
would be the weakening of the spirit of self-reli- 
ance on the part of the settler, without which he 
automatically fails. 

It is also well to bear in mind, that the experi- 
ence of Western Canada, broadly speaking, has 
been, that the first settler on the land has rarely 
succeeded. The permanent and successful occupant 
has generally been the second and sometimes even 
the third. The problem of creating new capital, 
while taking care of a family and paying interest 
charges on borrowed money, is a task involving 
such a degree of frugality, capacity and unremit- 
ting labour, that only comparatively few men 
measure up to the standard. In this respect, farm- 
ing is, of course, in no way different from any 
other class of business. 



342 WAKE UP, CANADA! 

In approaching the subject of assisted settle- 
ment of soldiers, it behooves the Government to 
walk warily. There is little or no precedent in 
Canada as a guide. In some of the Australian 
States, similar effort has been made along lines of 
general colonization. The United States reclam- 
ation service has also approached something of the 
sort in the disposal of irrigated lands. The only 
fairly analogous cases in Canada are the few 
assisted colonization enterprises at Yorkton and 
Saltcoats, the early Mennonite settlement in Mani- 
toba and the ready-made farm scheme of the Cana- 
dian Pacific Railway. The Mennonite coloniza- 
tion was eminently successful, but due entirely to 
the human element. The Yorkton and Saltcoats 
colonization projects, including Crofter coloniza- 
tion, were dismal failures. The C.P.R. ready- 
made farm scheme is the nearest approach to what 
the Government proposes to undertake, and even 
that differs in an essential point. 

The Railway Company supplied the settler with 
land, improvements and seed grain. The settler 
was supposed to have capital of his own sufficient 
to stock the farm, purchase implements and carry 
himself and his family until revenue came in. In 
other words, he was only financed to the extent of 
60 or 70 per cent, of his capital. The returned sol- 
dier will in most cases have to be financed for his 
entire capital. It takes a very prosperous business 
indeed to enable a man to carry the same on, pro- 
vide for necessary development, keep his family, 
pay interest on borrowed money, and also to repay 



THE RETURNED SOLDIER 343 

the entire capital invested. Frankly, taking it one 
year with the other, I doubt whether the small farm 
of the West is capable of doing that. And what 
about New Ontario? The Government will prob- 
ably find that in the end it must do more than 
merely lend money to these men on twenty-year 
payments with interest. 

4. 

I shall waste very little time in criticizing the 
present plan for soldiers' settlement announced by 
the Government, if, indeed, this product of a sim- 
ple and trusting mind should be dignified by refer- 
ring to it as a "plan." While the Act does not spe- 
cifically say so, it is perfectly obvious that it con- 
templates unorganized settlement, meaning that 
any soldier can take up Dominion lands or pur- 
chase lands anywhere and apply to the Board for 
a loan. To persist in such a course is to court in- 
evitable disaster, from the point of view of admin- 
istration and of the success of the individual set- 
tler. The Government apparently fears, that, if 
gathered in colonies, the settles would find it 
convenient and expedient to organize indignation 
meetings for the purpose of expressing criticisms 
of the Government and the administration. By 
continually comparing notes, grievances would be 
manufactured and agitators would proceed to air 
them. Quite probable. In fact, that would be 
almost certain to occur. And it would be very 
disturbing to the Government and to the Board. 
It would be an unmitigated nuisance. No one 



344 WAKE UP, CANADA! 

realizes more keenly than the writer, the many 
objections to the settlement of people in colonies. 
He has "lived" with the problem! On the other 
hand, in spite of all the drawbacks and objections, 
it is my absolute judgment that colony settlement 
is, in this case, the only feasible plan — the only 
plan, in fact, that will have a ghost of a chance to 
succeed, to any large extent. 

I enumerate below the principal objections to 
the present "plan" of settlement proposed by the 
Federal authorities: 

(a) The Government will be absolutely un- 
able to protect adequately the large advances 
made to settlers for investment in live stock and 
other liquid assets, and to promote the wise and 
profitable investment of this borrowed capital. 
(A) Opportunities for effecting economy and 
efficiency through co-operative effort amongst 
the settlers themselves will not be present. 
While this in itself would not lead to failure, it 
will be a serious obstacle to that measure of suc- 
cess the country will expect. 

(c) Special educational work amongst these 
settlers would be impossible or, at any rate, diffi- 
cult and spasmodic. 

{d) The character of this proposed scattered 
settlement would simply be reduced to, or might 
even fall below, the general average of prairie 
settlement; and the experience has been that less 
than 50% of such settlers succeed. The Govern- 
ment cannot afford a 50% failure. 

(e) The Government must take into the most 






THE RETURNED SOLDIER 345 

serious consideration the fact, that every failure 
under any scattered or unorganized "Soldiers' 
Settlement" plan will involve part or total loss of 
a large part of its investment, as there will be no 
one to watch such investment from day to day 
and to step in and protect it in case of emergency 
or to give the settler a helping hand at a critical 
moment. 

5. 

The land problem is admittedly the cornerstone 
of any colonization plan. The progress of the 
best settled and richest districts of Western Canada 
has for years been retarded through the presence 
of enormous areas of undeveloped Indian Re- 
serves. Some of these lands are amongst the very 
best in Western Canada. 

I am informed, that the total male Indian 
population between the ages of 16 and 65, living 
on Reserves in the three Prairie Provinces, is ap- 
proximately, 5,000. The area of the various Re- 
serves is, approximately 3,000,000 acres. If each 
male Indian between the ages of 16 and 65 were 
settled upon a 320-acre farm, 1,600,000 acres 
would be absorbed. This would leave an area of 
1,400,000 acres of the best lands in Western Can- 
ada available for Military Colonization. On a 
200-acre unit plan this would provide for 7,000 
soldiers. This would apparently go a long way 
towards solving the problem. 

I am not unmindful of the serious obstacles in 
the way of dealing in such a manner with Indian 



346 WAKE UP, CANADA! 

Reserves. The fact remains, however, that under 
pressure of mere public opinion, it has been suc- 
cessfully done during recent years in several in- 
stances. The psychological moment has now ap- 
parently arrived for dealing, finally and com- 
pletely, with the whole troublesome question. A 
crisis has arisen which justifies the Government in 
doing things autocratically, if necessary. The 
Government can do things to-day that it could not 
do before, and probably will never be able to do 
again. 

An announcement that the Government pro- 
posed to deal finally with these Indian Reserves 
and in this manner, would be hailed with delight 
by practically every resident in Western Canada. 
It would also seem most appropriate that the re- 
turned soldiers should be settled on what are un- 
questionably the very best vacant lands in the 
West. In the face of a national necessity, such as 
this, shallow sentiment or Indian obstinacy should 
not be permitted to influence the Government's 
action in this great welfare undertaking. The In- 
dian can be handsomely compensated and will, in 
the end, be much better off with his individual 
holding than roaming over enormous undeveloped 
areas of highly valuable lands, now needed 
urgently for national purposes. 

6. 

I have, incidentally, referred to the fact, that it 
is very questionable whether, under any plan of 
soldier settlement that might be put into effect, any 



THE RETURNED SOLDIER 347 

considerable number of these men would succeed 
in making their living, paying interest on the 
amount advanced and also repaying the principal. 
Farming in Canada is not so lucrative a proposi- 
tion that such a plan would be bound to succeed in 
any large number of instances. It will probably 
be found, that very material departures will have 
to be made from the present proposals. In other 
words, the measure of Government assistance may 
have to be increased. 

Having in view the importance of the object to 
be attained, the State could probably well afford 
to reduce the rate of interest to Zy 2 per cent. A 
scheme of amortization could also be worked out 
covering the repayment of principal and payment 
of interest over a period of fifty years. This would 
give the settler a much better opportunity to suc- 
ceed. It is true, that extension of payment could 
always be granted on a shorter contract, but that 
practice would be most objectionable from many 
points of view and would largely increase the task 
of administration. 

It is also worthy of consideration whether a long 
term lease of any land purchased, say from 50 to 
99 years, would not be preferable to a sale con- 
tract. The effect would be the same, and ample 
provision could be made whereby the occupier 
had an option to change his contract to purchase 
outright from the Government at any time. The 
annual rental could be based on the standard rate 
of interest fixed in connection with the loan for 
equipment and working purposes. 



348 WAKE UP, CANADA! 

The success of the whole undertaking will 
largely depend on the administration. Sym- 
pathetic consideration will have to be extended to 
these settlers in the many difficulties and disap- 
pointments that will inevitably confront them in 
their effort to become successful farmers. The 
supervision will have to be complete and system- 
atic, without bordering on interference. 

7. 

I would like to offer a word of comment on our 
proposed military establishment in Canada. It is 
perhaps as appropriate here as anywhere else in 
this volume. Prior to the war we maintained a 
very small standing army in Canada. The general 
plan was to develop our militia system and to 
utilize our permanent military establishment for 
instructional purposes. The conception was ex- 
cellent — the execution was exceedingly faulty. The 
fine Italian hand of the party politician was too 
much in evidence for good results and our attempt 
at an army was not perhaps taken sufficiently ser- 
iously by the public. 

Our Military College at Kingston has nearly 
always been efficient. It is one of the institutions 
of which we as Canadians have justly felt proud. It 
has compared favourably with the very best in the 
world. But when there were vacancies in our 
permanent instructional forces we generally over- 
looked our scientifically trained officers and ap- 
pointed some insurance man with political pull! 
The Kingston graduate went to the United States, 
where he was warmly welcomed, or entered the 



THE RETURNED SOLDIER 349 

service of some Canadian railway in an engineer- 
ing capacity. These men were educated by the 
State at considerable cost and then calmly turned 
adrift. When Canada wanted military instructors, 
she preferred the amateur, plus the pull, to the 
man technically trained at her own expense. Poli- 
tical venality could surely reach no lower depth! 

Prior to the war our enlisted man was almost 
invariably a drifter. Our establishments were 
always below strength, particularly in the West 
where it was sometimes difficult to obtain enough 
men for ordinary barrack duty. Desertions oc- 
curred constantly. The pay was absurdly low and 
there were not, in fact, any inducements whatever 
held out to the enlisted man compared with those 
readily available in civil life. When there was 
periodic unemployment we could recruit, but only 
for short periods. When employment conditions 
were favourable no new men were available and 
desertions soon reduced the unit to a bare skeleton 
force. If it had not been for the short course men, 
most of the Western units would have completely 
disappeared at harvest time. 

An Order-in-Council has recently been passed 
materially increasing our future military establish- 
ment and also providing more adequate pay than 
hitherto. One of the justifications set forth is the 
necessity that may exist of rendering military aid 
to the civil authorities in suppressing riots, or dis- 
turbances. It seems a very wise and reasonable 
move. But we should now grasp the opportunity 
to improve our whole army scheme. The enlisted 



350 WAKE UP, CANADA! 

men should be educated to take their places in civil 
life, upon discharge, on a higher plane than they 
could reach prior to enlistment. We should in 
addition to military instruction, formulate a 
scheme of general education and vocational train- 
ing that would make the time-expired man a more 
useful citizen than he was when he entered the 
military service. We should dwell less on the pen- 
sion idea in attracting recruits, than on the facil- 
ities offered for learning useful trades in the very 
generous spare time allowance customary in mili- 
tary life. Such a plan would not interfere with 
adequate military training and the added expense 
would be trifling. We should also stand a much 
better chance of attracting young men of a higher 
calibre to the rank and file of military service 
than we can otherwise hope for. 

In line with such a development would be a 
general plan to make our permanent military 
forces more useful to the country in time of peace 
than in the past. We are now making provision 
for 5,000 men and probably four to five hundred 
officers. Half of this strength will probably be in- 
fantry. Why not learn a lesson in economy and 
efficiency from other countries? The United 
States Engineering Corps performs valuable ser- 
vices to that country in connection with public 
works. For instance, all harbour and canal con- 
struction has been in its very capable hands for 
many years. The proposal was also made, that 
the U.S. Reclamation service should be under the 
jurisdiction of the military forces. There is a dis- 



THE RETURNED SOLDIER 351 

tinct tendency in the United States to widen the 
scope and responsibilities of its Engineering Corps, 
partly owing to the creditable fact, that in its 
whole history, covering the expenditure of many 
millions of dollars, it has the unique record of only 
one or two minor misappropriation scandals. It 
has stood conspicuously for honesty and efficiency 
of a very high order. In European countries the 
practice of utilizing military Engineering units for 
public works is also general. 

There is surely something to learn from other 
progressive countries in this respect. Why not 
enlist at least two-thirds of our proposed military 
establishment as Engineers? They could render 
useful civil services and, at the same time, be 
equally as effective as infantry in case of emerg- 
ency. There is all sorts of survey work to be done 
in this new country and will be for many years to 
come. Why not take a hand in this? Not, of 
course, by establishing a wholly unnecessary mili- 
tary topographical surveys branch, as was done 
prior to the war, to undertake the triangulation of 
country that had already been adequately covered 
by our most efficient and precise, and also most 
expensive, Geodetic surveys under the Interior De- 
partment, but by consolidating, as far as practi- 
cable, the present disjointed, overlapping, crazy- 
quilt survey services of Canada, now located in 
half a dozen different branches, bureaus and de- 
partments, which are a joke and a by-word 
amongst professional men, and placing them under 
the jurisdiction of one of the several highly cornr 



352 WAKE UP, CANADA! 

petent and highly-qualified men, in which these 
services abound, giving him military rank, and 
then incorporating the whole thing in the new mili- 
tary establishment. Some such plan as this is 
surely worth considering. There is no particular 
merit in a military unit devoting its entire atten- 
tion to drill and recreation. We shall have greater 
all-round efficiency if our enlisted men feel, that 
most of their time is constructively employed. 
They will also make better citizens. 

And — before I forget it — subsidize generously 
the regimental bands of the permanent units and 
also of some of the senior militia units. Let us 
have a string of splendid military bands from coast 
to coast in Canada. We can well afford to spend a 
little public money on the encouragement of music, 
if for no other purpose than to help us dispel, even 
momentarily, the dismal gloom cast over our 
smaller Canadian cities by the ever growing mem- 
bership and influence of well meaning, but mis- 
guided, "anti-joy" societies, which are rapidly 
driving cheery people away from our shores and 
morbid people into anarchism and Bolshevism! 



CHAPTER EIGHTEEN 

EDUCATION AND SANE STANDARDS 
1. 

IT is not my purpose to formulate any new "high 
brow" educational theory. I am not qualified 
to undertake such a task. But I do know by this 
time, wherein my own and my children's education 
woefully failed. In the modern school, we impart 
knowledge of a kind. We do not properly educate. 
I can only direct attention to the deficiency, as I 
see it, leaving the remedy to be discovered and ap- 
plied by the professional educationist. To prove 
one's case, it should only be necessary to call atten- 
tion to the criminally low salaries paid to Cana- 
dian teachers and also to the class of teachers such 
a system naturally attracts. The teaching pro- 
fession in. Canada is merely a convenient halting 
place on the road to other things. It must be clear 
that, from a financial standpoint, no sane young 
man or woman would deliberately fit himself or 
herself for teaching as a life profession under the 
conditions that prevail. The average annual 
salary for female teachers in Ontario is $626, the 
average in rural schools in Manitoba is $621. In 
Quebec the figure is $563 in Protestant, and $273 
in Roman Catholic Schools. In New Brunswick 
salaries to female teachers vary from $271.79 to 
$500.60 per annum. Nova Scotia statistics are dis- 

(353) 
12 



354 WAKE UP, CANADA! 

creetly silent on the subject. But why pursue the 
matter further? The feeblest intellect must com- 
prehend that the "key industry" of Canada, i.e. 
the education of the rising generation, is gener- 
ally in the hands of mere casuals, who loiter on the 
way a year or two at the teacher's desk and then 
proceed to more congenial and remunerative fields. 

Much fault may also be found with our facilities 
for technical education. Some years ago, a most 
valuable report was made on this subject by a com- 
mission composed of highly-qualified men. It now 
forms part of our dusty, mildewed public records. 
No action was ever taken by the authorities to give 
effect to the well considered recommendations of 
this commission. When everything is said, how 
very insignificant is the artificial aid Governments 
can give to industrial development by means of 
tariffs, compared with the influence on industry of 
the technically-educated craftsman and skilled 
mechanic, backed by efficient and economical shop 
management and a sane business policy. We are 
far behind our neighbours in the south and most 
other progressive countries in this respect. We 
should permit nothing to stand in the way of creat- 
ing the widest possible facilities in Canada for 
technical education of a very high order. This is 
one of the real and pressing needs of Canadian 
industries to-day. 

The fate of our rural educational system has 
largely been in the hands of the "hardshell" 
farmer, who would unconsciously measure a 
teacher's salary against what he pays his hired 



EDUCATION AND SANE STANDARDS 355 

hands, except for such regulating influences as are 
brought to bear in the more enlightened provinces. 
The result of this penurious attitude on Canada's 
part has, of course, been, that our higher class 
teachers have most frequently found it advisable 
to go south of the line, where their services have 
received more substantial recognition. Our 
schools presumably impart a certain amount of 
useful knowledge to our children in a very 
mechanical sort of way. But I am far more con- 
cerned with the other side of education. What 
are we doing to implant in the young mind ideas 
of lofty citizenship and unselfish patriotism; of 
courtesy and toleration; of sane healthy ambition? 
It is argued, that the home is the place for instruc- 
tion in these subjects. I totally disagree. I would 
sooner delegate these to the school and teach my 
children the three R's at home, if necessary. The 
school atmosphere lends itself vastly better to effec- 
tive and impressive lessons dealing with the 
humanities of life and duties of citizenship, than 
the perfunctory and irregular instruction the aver- 
age pupil would receive on such subjects in the 
average home. It is not my desire to urge, that the 
parents should be relieved of all responsibility for 
the instruction of their children, but merely that 
the teaching of the higher citizenship should be 
developed in our schools. 

2. 

I would like to say a word on modern tendencies 
towards false standards in life. The responsibility 



356 WAKE UP, CANADA! 

of the State is not to make men wealthy, but to 
make them wise, to teach the children to scorn 
sordid ambition and to discriminate intelligently 
between what is important and what is unim- 
portant. The desire to acquire mere wealth is 
essentially ignoble, apart from the fact that few 
men can ever completely satisfy such a diseased 
ambition. One standard of wealth having been 
attained, another looms up ahead. It is an unsat- 
isfactory goal. The intellectual State honours its 
great poets and artists, the humanitarian State 
its wise legislators and administrators, the militant 
State its great sailors and soldiers. The commer- 
cial State is apt to honour only its captains of com- 
merce and industry. History leaves little doubt on 
that point. It, therefore, behooves the State, 
through its educational system, to destroy utterly 
false standards and to set up true and noble ones. 
The patriotic press of the country should carry on 
the good work and frown down any attempt to 
bestow praise where undeserved. The press, in- 
deed, has almost the greater responsibility of the 
two. It staggers one to realize, that this great 
factor in the life and future of the nation is too 
often in wholly irresponsible hands, to the extent 
that each individual newspaper proprietor is ab- 
solutely a law unto himself as to whether his paper 
is to be a power for good or for evil in his com- 
munity, apart from the fact that his faculty of dis- 
crimination is not infrequently faulty. 

It is precisely this worship of false standards 
that is almost wholly responsible for the present 



EDUCATION AND SANE STANDARDS 357 

social unrest, and the impatience of labour with 
palliatory measures of reform. In the eye of the 
worker the "Golden Calf" is the great desider- 
atum in life. In the acquisition of wealth he anti- 
cipates the happy solution of all his problems. 
Wealth and happiness become synonymous terms. 
That is the sum total of all he has been taught. The 
captain of industry becomes his hero. The thinker; 
the artist, the scholar are almost beneath contempt 
— men who live in garrets and starve. The only 
true measure of the value of a man's services is the 
material compensation he receives. The parson is 
just tolerated, looked upon as a bit of a crank, 
receiving the proverbial pittance and raising a 
large family on nothing, cheerfully serving his 
Lord and Master. And a certain section of the 
press of the country plays up these false ideas to the 
very limit. The men whose comings and goings 
are most carefully recorded, whose opinions are so 
respectfully solicited on all subjects, the men 
whose pictures most frequently adorn the front 
pages of such papers, are, almost invariably, the 
prosperous men. When Governments accord 
public honours, how often do they come the way 
of the humbler, but greater citizen? It is wealth, 
or the faculty to acquire wealth, that is most fre- 
quently the subject of public applause and public 
recognition. 

3. 

Perhaps man was not intended to be happy and 
contented. Maybe the mainspring of all human 



358 WAKE UP, CANADA! 

progress lies in the inherent discontent, restlessness 
and unhappiness of the individual, driving him 
into the mad race for further material possessions 
and success, as moderns are now taught to inter- 
pret the word. It is perhaps his very striving after 
these evanescent, hollow and unsatisfying things 
that builds up nations. If so we are assuredly 
living in a glorified lunatic asylum. Labouring 
under the mental hallucination, that certain things 
are essential to happiness, which, as a matter of 
fact, have nothing to do with that elusive state of 
mind, we are permitting ourselves to be relent- 
lessly driven into striving for these things, only to 
find, when they are attained, that they utterly fail 
to satisfy. All our stress and effort, therefore, is 
wasted as far as any personal recompense is con- 
cerned. The State or community would seem to 
be the only beneficiary. 

In so far as equipping the embryo citizen to 
enter the ruthless struggle of life is concerned, our 
modern school system is probably all that could be 
desired. As I have tried to show, its efforts in 
teaching morality, courtesy and a true apprecia- 
tion of the duties and responsibilities of citizen- 
ship, are woefully deficient. We have banished 
religion from our schools. What have we sub- 
stituted? If ever there was a time when the young 
should be taught something about the deeper 
things in life, and the futility of worshipping false 
gods, it is the present. I cannot refrain from quot- 
ing here an extract from Smiles, — whose books 
might well be included in our public school cur- 



EDUCATION AND SANE STANDARDS 359 

riculum, — upon the "art of living," which so few 
of us have studied and begun to understand : 

. . . . The art of living deserves a place among the 
fine arts. Like literature, it may be ranked with the human- 
ities- It is the art of turning the means of living to the best 
account — of making the best of everything. It is the art of 
extracting from life its highest enjoyment, and, through it, 
of reaching its highest results. 

To live happily, the exercise of no small degree of art is 
required. Like poetry and painting, the art of living comes 
chiefly by nature: but all can cultivate and develop it. It 
can be fostered by parents and teachers, and perfected by 
self-culture. Without intelligence it cannot exist. 

Happiness is not, like a large and beautiful gem, so un- 
common and rare that all search of it is vain, all efforts to 
obtain it hopeless ; but it consists of a series of smaller and 
commoner gems, grouped and set together, forming a pleas- 
ing and graceful whole. Happiness consists in the enjoy- 
ment of little pleasures scattered along the common path of 
life, which, in the eager search for some great and exciting 
joy, we are apt to overlook. 

The art of living is abundantly exemplified in actual life. 
Take two men of equal means, one of whom knows the art 
of living, and the other not. The one has the seeing eye and 
the intelligent mind. Nature is ever new to him, and full 
of beauty. He can live in the present, rehearse the past, or 
anticipate the glory of the future. With him life has a deep 
meaning, and requires the performance of duties which are 
satisfactory to his conscience and are, therefore, pleasurable. 
He proves himself, acts upon his age, helps to elevate the 
depressed classes, and is active in every good work. His 
hand is never tired, his mind is never weary- He goes 
through life joyfully, helping others to its enjoyment. 
Intelligence, ever expanding, gives him every day fresh 
insight into men and things. He lays down his life full of 
honour and blessing, and his greatest monument is the good 
deeds he has done and the beneficent example he has set 
before his fellow creatures. 

. . . . It is not wealth that gives the true zest to life, 
but reflection, appreciation, taste, culture. Above all, the 
seeing eye and the feeling heart are indispensable. With 



360 WAKE UP, CANADA! 

these, the humblest lot may be made blessed. Labour and 
toil may be associated with the highest thoughts and the pur- 
est tastes. The lot of labour may thus become elevated and 
ennobled. Montaigne observes that "all moral philosophy 
is as applicable to a vulgar and private life as to the most 
splendid. Every man carries the entire form of the human 
condition within him. . . . 



But my chief complaint lies in the callous atti- 
tude of the citizen towards the State. He recog- 
nises no responsibilities. If a certain tax is im- 
posed, his main effort is directed towards evad- 
ing it wholly or in part. His code of honour per- 
mits him to defraud his country, when he would 
scorn not dealing with his fellow citizen as an hon- 
ourable man should. It is a most curious mental 
process, that condones robbing the state, i.e., all 
one's fellow citizens, and condemns defrauding an 
individual citizen. What has our public school 
system done to correct this point of view? 

Across the Pacific Ocean lies a great empire 
with a recorded history dating back some 4000 
years. That country has been overrun time and 
again by Tartar, Manchurian, Mohammedan and 
Christian. But instead of being swallowed up by 
the invading hordes, it has calmly absorbed them. 
When our forefathers hunted each other, dressed 
in skins, these wonderful people had a civilization 
of a very high order. To-day wealth is fairly dis- 
tributed. The farmer owns his land. To receive 
rent from land is one of the things that is "not 
done." Family discipline is so well observed, 
that police protection is largely superfluous. 



EDUCATION AND SANE STANDARDS 361 

There are four times as many judges in France as 
in the whole of China. The profession of law is 
looked down upon. The profession of arms fell 
into contempt a thousand years ago. The highest 
caste is the literary caste, open, however, to the 
lowliest citizen in the country. From this all Gov- 
ernment employees are recruited. China is essen- 
tially a democratic country. Its people are, as a 
whole, happy and contented, and only ask to be 
left alone. Its citizens seldom come into contact 
with the Government, in fact, China should be 
the ideal home of the anarchist, as she has appar- 
ently solved the problem of getting along without 
ordinances and acts of parliament at every step. 

The schools of China, while deficient in the 
direction of sciences, teach painstakingly the gen- 
eral Confucian principles of justice and morality, 
honest dealings, and duty to one's neighbour and 
the State. As a consequence, public honesty in 
China is of a very high order. But the greatest 
institution of all amongst these wise people is the 
family. Periodical councils are held in the home 
of the head of the family, that is, its oldest mem- 
ber. A brief lecture is delivered on some ancestor 
who distinguished himself, probably in the service 
of the State. This is followed by an inquiry into 
any complaints against members of the family and, 
we are told, that these family councils never dis- 
perse until each one present has assured the head, 
that he has faithfully paid all taxes due to the 
State! The young are brought up in an atmos- 
phere of conscientious performances of public 



362 WAKE UP, CANADA! 

duties and respect for constituted authority. Per- 
haps in spite of our boasted civilization, we have 
something to learn from John Chinaman! 

S. 

How comes it, that China survived one alien in- 
vading, devastating horde after another, while the 
map of superior Europe continually changed with 
kaleidoscopic thoroughness and suddenness? It is 
a fascinating riddle. Possibly China has not been 
conquered and destroyed, because China simply 
cannot be conquered and destroyed. Her con- 
sistent Confucianism, ancestor worship and lofty 
aggrandisement of the family organisation into the 
most exalted agency in her national scheme, is per- 
haps the solid rock upon which her unchanging 
existence rests and upon which every attempt at 
subjugation has finally foundered ingloriously. In 
the last analysis it seems clear that the home has 
been China's national shield and safeguard during 
all the ages — that simple, fundamental unit upon 
which all lasting progress, human welfare and 
national homogeneity must in the end depend. 

What has been the tendency of our modern 
democracies in respect to this basic, all-important 
social unit? The home is essentially a rural in- 
stitution — "God made the country and man made 
the town." In the country we still find real homes. 
Our "up-lift" societies are always prating and 
ranting about "guarding" the home, but in our 
ever-growing cities, the product of the modern 
factory system, with its dense population hived 



EDUCATION AND SANE STANDARDS 363 

in narrow, tiny tenements, sleeping, fitfully and 
restlessly, during the heat of the summer, on roofs 
and fire escapes, wherever a breath of cool air may 
be caught, rising unrefreshed, to pursue its 
grinding, monotonous daily tasks in crowded, 
stifling, noisy shops — such are the "home" con- 
ditions of the submerged "masses." The "classes" 
— high and middle — fare rather better; but even 
they are evidently not living up to their oppor- 
tunities. The "self-contained" flat (no children 
wanted) with restaurant below, the lurid, hectic 
night life of the great cities on this continent, the 
appalling divorce statistics, falling birth rate — 
everything points decidedly towards the lessening 
influence and importance of the home in our mod- 
ern "up-to-date" scheme of life. 

6. 

In conclusion, I deliberately reiterate the state- 
ment that the foundation of all sound and orderly 
human progress is education. To vary the formula, 
it may be added, that the development of a broad 
spirit of toleration and of patriotism is equally 
essential. Possibly the former breeds the latter. 
A popular writer recently bemoaned our "lost sense 
of right and wrong," as the greatest tragedy of the 
hour. Perhaps this is where our education towards 
saner standards should really begin! The main 
problem involved in any sweeping social or poli- 
tical reform is not so much to decide upon and 
draft the particular measure of reform, as to fit 
successfully the human unit into the proposed new 



364 WAKE UP, CANADA! 

order. In other words, the national programme 
must of necessity always be limited to the ability 
of the majority of the citizens to live up to it. This 
is the great brake on social progress and the dis- 
couraging feature about social reorganization. 
The main responsibility of the statesman is to 
realize when the psychological moment has arrived 
— when the State can safely act. 

A nation's process of education and training 
often takes weird forms. Misfortune, persecution 
and starvation, — each has played its part as 
national schoolmaster. A terrible upheaval, such 
as the world has witnessed during the past few 
years, is perhaps the most effective school of social 
reform for the multitude. It has compelled 
nations to co-operate and has brought vividly 
before the citizen its object lessons of successful 
public control, forced upon reluctant governments 
in the emergency. These lessons will not be for- 
gotten. Social reform advanced a century in one 
mighty bound. Perhaps herein lies the justifica- 
tion, or divine purpose, of Armageddon. 

But what of the nations for which the blood bath 
of Armageddon was taken in vain? The nations 
that refuse to learn and inwardly digest, whose 
statesmen, labour leaders and captains of industry 
and commerce proceed on their way serenely and 
imperturbably — the nations undisturbed by the 
gathering clouds of anarchy, whose leaders have 
souls so small and vision so narrow, that they can- 
not find the way out of the well worn rut, whose 
sole conception of reconstruction is "business as 



EDUCATION AND SANE STANDARDS 365 

usual." Will they be able to stem the onrushing 
tide of social unrest that has already swept into the 
maelstrom the mightiest European Empire and is 
rushing westward with gathering fury, to sub- 
merge and envelope other nations? Where in its 
ruthless path will it encounter the strong, arresting 
wall of enlightened public opinion reared on the 
solid foundation of social justice, against which it 
will impotently spend its force? 

I have referred to that gigantic oriental nation 
across the Pacific with a history stretching back 
far beyond the dimmest, darkest period of dawning 
occidental social consciousness. Who knows whe- 
ther history may not repeat itself? — Whether, in 
the irony of fate, China, bland, unchanging — 
China, the despised, who in turn utterly despises 
us and our cruel, ruthless, money-mad civilization, 
who regards us contemptuously, as miserable, 
ignorant upstarts — whether this inscrutable nation 
may be destined to witness again our destruction, 
and the levelling into the dust of all we have built 
and striven for during centuries, and once more 
behold the Western world arise from the ashes and 
proceed to build anew with the seeing eye, know- 
ing hand and comprehending mind! Who 
knows? 






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